The market just delivered its first 10% correction since October 2023. Sound dramatic? It’s not. In fact, since 2009, we’ve seen nine such corrections roughly every 1.6 years. Corrections are normal. What’s different this time is the sheer speed: a 10% drop in just 20 trading days. That makes this the fifth-fastest correction of its size in the past 75 years.
History Says: Stick to Your Plan
Here’s a stat worth remembering: After the last five fastest corrections, the average 12-month return for stocks was +20.8%. All five instances ended in gains.
Does that guarantee a rebound? Of course not. But history stacks the odds in favor of patient investors.
Why the Pullback?
- Trade war theatrics
March Madness isn’t just for basketball this year. The administration’s aggressive public negotiating tactics, including tariffs, have spooked markets. President Trump’s deal-making style is playing out in headlines, fueling fears of a global trade war.Is this the start of a larger downturn? Probably not. If a recession were imminent, we wouldn’t see foreign equities holding up or copper prices rising. Both are signs that global growth is still intact. Credit markets are often the first to signal trouble and are also steady. - Fiscal tightening fears
Government spending cuts are another source of worry. Spending stimulates growth; cutbacks can slow it. Combine that with fears of inflation, and you’ve got a recipe for investor anxiety. Some argue the administration may be intentionally cooling growth to control inflation, effectively doing the Fed’s job for them.
The Emotional Toll of a Politicized Market
What makes this correction feel worse than others is the political noise. Policy tweets, tariff threats, and doomsday headlines amplify uncertainty. But remember: great companies adapt. Strong management teams are built for this. They navigate complexity, find new paths forward, and continue delivering returns over time.
What Should You Do Now?
- Don’t react emotionally to headlines.
- Revisit your asset allocation and ensure it matches your risk tolerance.
- Keep a long-term focus — corrections are not permanent.
- Use this period to identify opportunities.
Bottom Line
Corrections are part of investing. This one arrived on schedule, just faster than usual. While headlines may scream chaos, history and fundamentals suggest resilience. As always, if you’d like to talk through how this environment impacts your portfolio, reach out. We are here to help.
