Financial Planning Fridays #179: The Market Will Go Down in 2026
Using S&P 500 return data going back to 1990, this video shows that some level of intra-year decline has occurred in every single year, even ones that finished with strong gains. It explains that markets have historically finished positive in roughly three-quarters of years despite these declines, and argues for preparing for volatility in advance rather than trying to predict when it will happen. Past performance does not guarantee future results.
Using S&P 500 return data going back to 1990, this video shows that some level of intra-year decline has occurred in every single year, even ones that finished with strong gains. It explains that markets have historically finished positive in roughly three-quarters of years despite these declines, and argues for preparing for volatility in advance rather than trying to predict when it will happen. Past performance does not guarantee future results.
Key takeaways
- Since 1990, the S&P 500 has experienced a decline at some point during every calendar year, even years that finished positive.
- The average intra-year decline since 1990 has been roughly 14.3 percent, even though the average annual return has been about 10 percent.
- Historically, the S&P 500 has finished positive in roughly 75 percent of years and negative in roughly 25 percent, based on data since 1990.
- A disciplined strategy focused on preparation, rather than trying to predict the timing of a decline, is the approach emphasized in this video.
Hi friends, I'm sure the market is going to go down at some point in 2026. How can I be so sure? Because the market has gone down every single year at some point throughout history. This chart shows the S&P 500 returns going back to 1990. Each bar represents the final return for the year, and each diamond shows the largest intra-year decline, in other words, how far the market fell at some point during that year. So even in years that end with a great return, investors often experience large declines along the way. Volatility isn't an exception or unusual. It's normal.
Since 1990, the average annual return of the S&P 500 has been about 10%. The average intra-year drawdown has been roughly 14.3%, that you had to endure to reach the 10% annual gain. Despite those declines that happened every single year, the market finished positive about 75% of the time, and negative only about 25% of the time. Most years end up positive, but none of them are smooth.
This is why we focus so much on preparation, not prediction. We know the temporary declines are coming. We just don't know when, how fast, or how uncomfortable they'll feel in the moment. That's why having a disciplined investment strategy in place ahead of time matters so much. When volatility shows up, and it always does, we don't want to panic or react negatively. The goal is to rebalance, stay invested, and take advantage of the opportunities that volatility creates.
The biggest risk investors face isn't that markets go down. It's being surprised by something that has happened every year for decades. History shows us that volatility is normal, declines are inevitable, and discipline has been rewarded. At Presilium, our job is to make sure you're prepared before the next decline shows up so you can move through it with confidence and take advantage of the new opportunity. Thank you, and I look forward to talking with you next Friday morning.
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