The past five US stock market sessions have turned up the volatility to 11.1 The decline of -10.5% over April 3–4 was the worst two-day stretch for the S&P 500 Index since March 12, 2020. Then, on April 9, the index gained 9.5%, the third largest one-day return in 30 years.
During these sorts of ups and downs, it’s helpful to zoom out and view market returns over the longer term. Trailing one-, three-, and five-year returns were in line with historical ranges, with or without the rally on April 9. And the effect of a single day’s return becomes muted when expanding the measurement period. For example, while the one-year return swung from -2.9% to 6.2% after April 9, the five-year return budged much less, from 14.0% to 16.4%.
This is not meant to trivialize recent market volatility. Rather, it’s a reminder that when it comes to stocks, taking the long view may help investors avoid reacting to short-term market movements. The nine-percentage point difference in one-year return between April 8 and 9 illustrates the danger of panicking and divesting just one day early.
 |
Past performance is not a guarantee of future results.
Source: FactSet. Sample period is April 10, 1995–April 9, 2025. S&P data © 2025 S&P Dow Jones Indices LLC, a division of S&P Global. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio.
1. If this reference is unfamiliar, you need to see the movie This Is Spinal Tap immediately.
Disclosures
All expressions of opinion are subject to change. This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions. Diversification neither assures a profit nor guarantees against loss in a declining market.
Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.
Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value
Dimensional Fund Advisors does not have any bank affiliates.
