When the Market Tests You, Listen
When markets fall sharply, they test not just your portfolio — but you.
In April, the S&P 500 dropped nearly 20% in a matter of weeks.
For many investors, it wasn’t just a financial dip — it was an emotional gut punch. If you felt anxious, lost sleep, reconsidered big purchases or travel plans, or found yourself itching to change your investment strategy, it’s a sign worth heeding: Are you taking on more risk than you can truly stomach?
It reads like the fine print on a prescription drug label — and that’s the point. Many have forgotten the “side effects” of investing in equities.
The past 15 years have been a gift. The S&P 500 has compounded at 16% annually, making it one of the strongest 15-year stretches in history — rivaled only by the post-WWII boom and the late-90s tech mania. And when volatility did appear, it was often met with a howitzer of government support.
This April was a reminder that the market doesn’t owe us smooth sailing. Volatility is the price of admission. As financial author Morgan Housel puts it:
“The prize inside is superior long-term returns — but you have to pay the price to get the returns.”
A Normal Month — Statistically Speaking
April wasn’t unusual. Since 1928, the stock market has averaged a 10% drop nearly every year. Corrections of 20% or more happen about once every three years. These bouts of volatility aren’t predictable — but they’re inevitable. Whether sparked by erratic trade policy or another catalyst, they may feel rare in the moment, but they’re a normal and expected part of long-term investing.
Let April Be a Personal Stress Test
If this latest round of volatility caused meaningful anxiety or second-guessing, that’s not a failure — it’s a signal. Your portfolio might be misaligned with your true risk tolerance.
Chasing returns during bull markets is easy. But building a portfolio you can stick with when things get rocky? That’s the real test. The best investment strategy isn’t the one with the highest upside — it’s the one you won’t abandon when volatility returns, as it inevitably will.
Now’s a Great Time to Ask Yourself:
Can I truly handle the swings that come with owning mostly stocks?
Do I have the right mix of growth, stability, and liquidity?
Is my current plan built to survive both good and hard years?
If you’re unsure, that’s exactly the kind of conversation we have with clients. Because risk tolerance isn’t theoretical — it’s emotional. And your plan should reflect that.