Why Market Volatility is Just a Blip in the Big Picture

The last major market downturn we experienced was in 2022. It was driven by rising inflation and a sharp increase in interest rates. Interestingly, many investors didn’t find it as particularly alarming as past bear markets. Unlike previous market shocks, this one unfolded gradually. For most Canadians, the impact was felt more so at the checkout line in the grocery store than in their investment portfolios.

Fast forward to today, and we’re once again facing a wave of anxiety—this time due to an event-driven sell-off in the markets. These moments can feel unsettling, especially when headlines are dominated by uncertainty. But if we take a step back and view the broader landscape, a different picture emerges.

Over the past two decades, we've witnessed a series of significant events that shook the markets. In 2020, COVID-19 led to a global economic slowdown. In 2008 and 2009, the collapse of Lehman Brothers triggered a financial crisis. Each of these moments caused widespread concern, yet the long-term trend of the market has remained positive.

When we zoom out and look at a historical chart of the market, these sharp declines appear as mere blips. Time and again, the market has shown resilience and a tendency to recover. And looking ahead 5, 10, or 15 years from now, it’s likely that today’s challenges will be viewed through the same lens—as just another momentary setback in an otherwise upward journey.

The key takeaway for investors is this: volatility is normal. Emotional reactions are, too. But the most successful investment outcomes generally occur from maintaining a disciplined approach and staying focused on your mid to long-term goals.

By keeping perspective and not letting short-term noise derail your strategy, you position yourself to benefit from the long-term growth potential that markets continue to offer.