Sudden market downturns can be unsettling. But historically, US equity returns following sharp downturns have, on average, been positive.
A broad market index shows that US stocks have tended to deliver positive returns over one-, three-, and five-year periods following steep declines.
Cumulative returns show this to striking effect. Five years after market declines of 10%, 20%, and 30%, the cumulative returns all top 50%.
Viewed in annualized terms across five years, returns after these declines have been close to the historical average over the entire period of 10.1%.
Stocking with your plan helps put you in the best position to capture the recovery.