The S&P 500 has a long history of going up 10% a year on average. But it’s a big mistake to think you will get a 10% return every year when you invest. It’s actually the exact opposite. The stock market very rarely goes up by 10%! Out of almost 100 years, the S&P 500 has only gone up between 8%-12% SIX times.

This year, so far, after a rough day yesterday, the S&P 500 is down about 12%. It doesn’t feel great to see the market go down, but you can see we’re in good company with LOTS of down years before us. What’s going to happen the rest of this year? I have no idea. Neither does the stock market, which is why it’s jumping around so much as rumors of tariffs, interest rates, and federal reserve chair firings continue to swirl. But I know a couple things:

• If GOOD news unexpectedly comes out, the market will jump up. And by the time you hear the news it will be too late. So the logic “I’ll wait until the market rebounds to get back in” is guaranteed to have you MISS the rebound. You gotta buy (or better yet stay in) before the rebound happens.
• While I don’t know what 2025 holds, I’m nearly positive if you could go visit the year 2045, which will be here faster than you think, everyone then will WISH they were investing way back in 2025. Just like we wish we were investing back in 2005.

What’s the main takeaway for you? Keep investing early and often in low cost index funds. There will be great years. There will be terrible years. That’s all part of investing. Buy more shares at a discount when the stock market is down and reap the rewards when it bounces back. And it will eventually bounce back. It has a 100% track record of doing that!

This visual is from research done by BlackRock, using S&P 500 returns from 1926 through the end of 2024.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Vivi, Shane, and Jeremy