Why This Market Feels Scary — And Why That's Actually Normal

If you've been watching the markets lately, you've probably had that familiar knot-in-the-stomach feeling. Oil prices have surged with the escalation of the U.S.-Iran conflict, the S&P 500 has slipped below its 200-day moving average, and the headlines have not been kind. Monday's rally — the Dow up over 630 points, all 11 sectors in the green — offered some breathing room. But I've been hearing from clients who are still uneasy, and I think it's worth putting all of this in historical perspective.

The Number That Puts It All in Context

Since 1980, the average intra-year decline in the S&P 500 has been approximately 14%. That's not the worst year on record — that's the average year. And in 34 of those 45 years, despite gut-wrenching drops along the way, the market finished with a positive return.

The market falling hard and then recovering isn't a bug. It's a feature. It's what the market does, historically, over time.

Recent History Makes the Case

January 2025 — The DeepSeek Shock. A Chinese AI startup called DeepSeek announced a model that rivaled the best American AI systems, reportedly built at a fraction of the cost. Nvidia lost 17% in a single session — the largest single-day market cap loss in stock market history. The broader market sold off sharply. By mid-year, the S&P 500 had recovered and was hitting new all-time highs.

Spring 2025 — Liberation Day. The Trump administration's sweeping tariff announcement in April 2025 sent the S&P 500 down nearly 19% from its February peak. The Nasdaq entered a bear market. More than $6 trillion in market value was erased in 48 hours. Then the tariffs were paused on April 9th, and the S&P surged 9.5% in a single day. By May 13th, the index had turned positive for the year. By late June, it was at all-time highs.

We could go further back: COVID in March 2020 produced a 34% decline in five weeks — the fastest bear market in history — followed by a full recovery by August. The 2008-2009 financial crisis wiped out more than half the market's value, and then the decade that followed was one of the longest bull runs on record.

The pattern is consistent, even when each episode feels unique.

Why Getting Out and Back In Doesn't Work

This is the conversation I have more than any other during volatile periods. A client calls, worried, and says something like: "I'm thinking about moving to cash until things settle down."

I understand the impulse. But the data is clear: it doesn't work.

The biggest single-day gains in market history tend to cluster right around the biggest drops. That 9.5% tariff-pause surge last April? If you had moved to cash the week before, you missed it. Monday's Iran-driven rally? Same story. And once you're on the sidelines watching the market recover without you, it's very hard to pull the trigger and get back in. You wait for it to "feel safe." By the time it feels safe, you've already missed a substantial portion of the recovery.

No one — not Wall Street's best hedge fund managers, not the economists on TV, not anyone — can consistently predict which days the market moves up or down. The math of long-term investing only works if you're present for the good days as well as the bad ones.

What the Current Situation Looks Like

The present uncertainty is tied primarily to the U.S.-Iran conflict and its effect on oil prices, which have been the main driver of the recent market weakness. Iran's denial of any active talks creates the potential for ongoing headline risk. This will likely be a volatile stretch.

But discomfort isn't the same as disaster. The market has navigated pandemics, financial crises, tariff wars, and geopolitical shocks. Its long-term trajectory has been upward through all of them.

One Thing You Can Do

If you're genuinely concerned — not just watching the tickers nervously, but actually unsettled about your financial situation — the right move is to have a conversation about your plan. Not to make a reactive portfolio change, but to make sure the risk you're carrying is the right amount of risk for your timeline and your needs.

That's what I do for the families I serve here in Canton and across Cherokee County. If you'd like to talk it through, call me at (678) 880-6267 or send me a message through the contact page. I'm always available.

— Jack Shampine

J. Lyndon Financial | Canton, GA | Independent, fiduciary financial advice

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Investing involves risk, including possible loss of principal. All indices are unmanaged and may not be invested into directly.