Facts Not Opinions

“Sudden market downturns can be unsettling. But, historically, U.S equity returns following sharp downturns have, on average, been positive.” –Dimensional Fund Advisors recent research paper


Everybody seems to have an opinion on how we’re going to come out of the coronavirus pandemic. What type of recovery are we going to have? Truth be told, nobody knows. It’s all speculation.

What we do know is how markets have done after other big market declines. DFA has put together a great one page chart (attached above) showing average 1yr, 3yr and 5yr returns after 10%,20% and 30% declines going all the way back to 1926. Pretty promising looking data.

History Shows That Stock Gains Can Add Up After Big Declines

Nice to see some data based on actual facts and not someone’s opinion of what they think might happen. One thing we know for sure….historically, the market has recovered 100% of the time after every downturn.