Is This Time Different? A Look at Volatility, History, and Perspective
- Holzberg Wealth Management
- 5 days ago
- 7 min read
Updated: 5 days ago
HWM Market Recap - April 2025
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If you take a step back and look at stock market history, downturns start to feel familiar – even if the causes always seem different.
The stock market decline of 2022
The COVID-19 shock in 2020
The Great Financial Crisis in 2008
The early 2000s recession
The September 11th attacks
The dot-com bubble in the late 1990s.
Each one came with different economic triggers, but they all shared one thing: they sparked the same emotional reflex in investors – fear, uncertainty, and the urgent need to do something.
This year has been no exception. We saw a more than 15% decline followed by a 9.5% single-day gain – all in just a few months. That sort of movement can make it hard to keep your head on straight.
Let's be honest: volatility feels scary. Especially if you are approaching or already in retirement. When your nest egg dips into the red, it does not feel like a paper loss. It feels like a personal crisis.
When things feel scary, the natural instinct is to act, to make a sweeping change to ease nervousness. But market volatility is inevitable. It is the cost of admission for long-term growth. And when we zoom out, what separates successful investors from the rest is not luck or the ability to time the market. It is discipline.
"A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy." – The Psychology of Money by Morgan Housel
Over the past 85 years, the stock market has undergone 46 double-digit corrections. Only 14 of those became a 20% or worse bear market. That means that 70% of the time, corrections did not spiral into a full-fledged bear.
S&P 500 Corrections Since 1940
When markets feel as unnerving as they do now, it is normal to ask: Is this time different? After all, before Wednesday, the market dropped 11% in two days. That is a gut punch.
Let's rewind the clocks back five years and see how well those who were able to tune out the noise and stick to their plan performed.
In early 2020, a novel coronavirus was spreading like wildfire all over the globe, and it sent shockwaves throughout the global economy. The US stock market dropped 34% in just 23 days – faster than ever before. The VIX index, Wall Street's so-called "fear gauge," hit a record high. Everyone was panicking.
But within a year, the market had risen 78% from its lowest point. Those who stayed invested participated in one of the sharpest rebounds ever. Those who sold during the chaos missed out. Every period of uncertainty brings unique challenges, making it more difficult for investors to keep the faith.
History demonstrates that time after time, the markets overcome every previous "unprecedented" challenge. The Great Depression, world wars, the inflation crisis of the 1970s, Black Monday in 1987, the Great Recession of 2008 – markets have weathered them all. Each one tested investors' patience and resolve. And each time, the market recovered – rewarding those who stayed in their seat.
Of course, there are no guarantees, but that is how it has worked historically. That is not to say it is easy. When we see wild swings in the market, our instinct is to run for cover. Some investors respond by pulling their money out until things “calm down.” But these near-term-minded reactions often lead to lower returns than if you did nothing.
The Cost of Trying to Time the Market
This is not to say that you should never make changes to your portfolio. On the contrary, a beautiful garden requires maintenance and care. Market downswings can be an opportune time to sell lower-grade holdings and immediately reinvest the same amount into higher-quality positions. For taxable brokerage accounts (i.e., individual brokerage accounts, joint accounts, and trust accounts), this can provide a tax savings opportunity through tax loss harvesting. The key is knowing the difference between thoughtful changes based on your life events and hasty decisions driven by scary headlines. The former is thoughtful financial planning; the latter is trying to time the market.
Successful investing is about picking the right portfolio for your level of risk and having conviction, perspective, and a plan. Here is what we have seen work for clients over time:
Accept that uncertainty is the cost of opportunity. Higher expected returns are your “reward” for taking on greater risk.
Align your investments with your life, not the news cycle.
Seek partnerships, not predictions. Behavior plays an integral role in investing. Working with a trusted financial advisor can help you create a personal plan that fits your goals and aligns with your values. Working with a professional who has a solid understanding of how markets work leads to better decisions.
If you are able to grasp how markets function, you are more likely to think objectively during periods of volatility and reap the potential rewards of compounding. If you put $10,000 in the S&P 500 at the start of 1970 and left it alone, you would have more than $3 million today despite living through eight recessions, multiple wars, political upheavals, and technological revolutions that transformed entire industries. That is not because you timed the market perfectly. It is because the market rewards those who understand that the key question is not whether uncertainty will appear but how we respond when it does.
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Monthly Changes in Indices
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Monthly Performance By Sector
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Interest Rates: The Federal Open Market Committee (FOMC) unanimously voted to hold interest rates steady for a second straight meeting. This follows three consecutive rate reductions that began last September.
Inflation: The Consumer Price Index (CPI) increased 0.2% month-over-month in February, after rising 0.5% in January. Over the last twelve months, CPI increased 2.8%. Core CPI (which excludes food and energy) increased 0.2% in February compared to January and rose 3.1% compared to a year ago.
Housing: According to the National Association of Realtors, existing home sales increased 4.2% in February and slipped 1.2% from one year ago. The median existing-home sales price rose 3.8% from February 2024 to $398,400 – the 20th consecutive month of year-over-year price increases. Sales of new single-family houses rose 1.8% in February from January and rose 5.1% from February 2024. The median sales price of new houses sold in February was $414,500.
Mortgage Rates: As of April 3rd, 2025, the weekly average for a 30-year fixed-rate mortgage is 6.64%, slightly below the 52-week average of 6.74% and down 0.18% from a year ago.
Employment: According to the Bureau of Labor Statistics's Employment Situation Summary, unemployment was little changed in March at 4.2%. Employment increased in health care, social assistance, and transportation and warehousing.
Consumer Sentiment: The University of Michigan's Surveys of Consumers for March slid 11.9% from February, marking the third straight monthly decline. Compared to its reading from one year prior, consumer sentiment is down 28.2%. Year-ahead inflation expectations increased from 4.3% in February to 5.0% in March – the highest reading since November 2022. Long-run inflation expectations increased from 3.5% in February to 4.1% in March.
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About the Author
Holzberg Wealth Management is a family-owned and operated financial planning and investment management firm based in Marin County, CA. As your financial advisors, we serve you as a fiduciary and are fee-only, so we never receive commissions of any kind. We help individuals and families like you in the greater San Francisco Bay Area and nationwide with the financial decision-making process to organize, grow, and protect your assets.
** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions. Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Any charts and graphs provided are hypothetical and for illustrative purposes only, are not indicative of any investment, and assume reinvestment of income and no transaction costs or taxes.