Market Pullbacks

Originally published on January 25, 2022.

The markets are in the middle of a pullback, and while it can feel like unprecedented times, the truth is that declines like this happen fairly frequently. For those of you who have followed Black Barn since the beginning, we've weathered 20-35% declines in January-February 2016, October-December 2018, and of course March 2020. A pullback in 2022 doesn't seem so wild when you put it in historical context.

By looking back, we can see the result of sticking with stocks through those three declines. Including all three major declines, the stock market still managed to more than double:

There have been quite a few market declines since 2016. Six years later, the S&P 500, a common proxy for the stock market, has grown by over 115%.

When the markets take a dive, it's not easy to stay invested. But by sticking to the investing plan through thick and thin, you put yourself in position to compound your wealth at a much higher rate than you otherwise would have by playing it safe in cash.