Don't fear the bear

Still recovering from the Sunday scaries? You’re not alone.

The S&P 500 sank into correction territory last Thursday, meaning it fell over 10% from its last all-time high. Investors are understandably worried that this is the beginning of a slippery slide into a full-blown bear market, or a 20% decline. After all, much of the selloff has revolved around tariff uncertainty, fears of a recession, and generally sinking sentiment—and none of those issues have resolved themselves as of yet.

It didn’t help that on Sunday, Treasury Secretary Scott Bessent told NBC’s Meet the Press that he’s not bothered about a market correction, further underscoring the Trump Administration’s pivot away from using the stock market as a scoreboard—and making it clear that the president doesn’t plan to bail markets out.

So, with this wall of worry rising above investors, is it officially time to panic?

History says no.

Take a deep breath

The truth is, these sorts of corrections happen a lot more frequently than you’d think.

The S&P 500 has experienced a pullback of 10% or more 42 times since 1950—but the index has ended the year lower than where it began only 16 times in the last 75 years, as CEO of Creative Planning Peter Mallouk pointed out. “Over the last 75 years, the average intra-year market drop has been 14%,” Mallouk wrote. “If you are overly stressed out about the current 10% drawdown, the stock market isn’t for you.”

If you’d prefer to focus on more recent history, Chief Market Strategist at Carson Investment Research Ryan Detrick can help. He recently noted that, considering the previous bear markets of 2020 and 2022, a third such decline in just five years would be extraordinarily rare.

“We’ve never seen back-to-back bears so close (only 1.9 years apart), so could we really have a third bear so soon?” he wrote. “If we did that, [there would] be three bear markets starting within five years of each other, breaking the previous record of nearly seven years between 1966 and 1973.”

Finally, if you’re more worried about the economy falling into a recession than you are about the market sinking into bear territory, Deutsche Bank’s Global Head of Macro Research Jim Reid has you covered:

Since 1928, there have been 60 stock market corrections. But according to Reid, corrections were a precursor to a recession only 44% of the time, while 56% of the time there’s nothing to worry about.

TLDR: Yes, it’s a scary time to be investing. But setting aside emotion and focusing on facts is a good way to beat the bear market blues—and the fact is that market shakeups are par for the course. Protecting your portfolio with diversification across equities, bonds, and hot commodities like gold can go a long way toward easing your fears.—MR