If you’ve been reading recent market commentary, you’ve likely come across headlines like this:
“Goldman’s David Solomon and Morgan Stanley’s Ted Pick both see a correction coming in the next 12 to 24 months. Solomon says ten to twenty percent. The S&P 500 is trading near its most expensive level since 2000.”
These are serious voices in the financial world, and their concerns are not without merit. But it’s important to view such predictions through a broader lens. Even Solomon himself pointed out that 10% to 15% market pullbacks can happen “often, even through positive market cycles.”
In fact, we experienced nearly a 20% decline in the S&P 500 earlier this year, in April 2025, and the market has recovered meaningfully since then (up +15.32% year-to-date, as of November 24th). It’s important to remember that market corrections are not only common—they’re expected. Historically, markets pull back 10% or more nearly every year.
According to JP Morgan, the average intra-year drop in the S&P 500 since 1980 is -14.1%, yet annual returns were positive in 34 of the past 45 years (as of 2025). This underscores the idea that short-term volatility is normal, even in years that turn out to be strong overall. (See chart below for more details.)
Why Asset Allocation Is Your Best Defense
Investors sometimes feel the urge to “do something” when the news turns negative. But if your portfolio is already aligned with your risk tolerance and long-term goals, staying the course is often the wisest choice.
For example, someone with a 60/40 portfolio—60% in stocks and 40% in bonds—is generally taking a balanced approach that aims to capture long-term growth while tempering the impact of volatility. This kind of diversified allocation is designed to absorb normal market fluctuations without derailing progress toward your goals.
If You’re Still Feeling Uneasy
Market predictions, especially from prominent figures, can shake confidence. If you’re feeling nervous about your current positioning, it’s okay to ask questions. Your financial advisor can certainly review your allocation and consider additional changes to reduce risk.
That said, we generally advise against trying to time the market. Reactionary moves, especially in response to short-term headlines, often result in worse outcomes over time. The better approach is to build a portfolio that reflects your personal comfort level and let it do its job through both calm and turbulent markets.
Bottom Line
Corrections are a normal part of investing. Market forecasts can provide perspective, but they shouldn’t override a sound financial plan. If you’re feeling unsure, reach out. We’re here to help you assess your strategy—not just in the context of current headlines, but in light of your long-term goals.
Staying grounded during uncertainty is one of the best investments you can make.
