How Often Do Stocks Fall?

The S&P 500 fell nearly 6% today, leaving the index 11% below its all-time high.

You can see in the chart below that losses in the stock market range from mildly uncomfortable to absolutely excruciating with a mix of emotions in between.


Right now stocks are in what the newspaper calls “correction territory,” which means that they’re more than 10% below the highs. Historically, the market has been in this position roughly 1 in every 5 days.

Investing hurts. The market has only hit an all-time high on 7% of all days, which means that if you open your account on any given day, there is a decent chance that you’re under water. In fact, as my colleague Nick Maggiulli has shown, “if you randomly picked a trading day for the Dow Jones Industrial Average since 1970, there is a 95% chance that the market would close lower on some other trading day in the future”.

Investing is a game of endurance, with the biggest gains accruing to those that can most withstand the pain.


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