Financial Planning Fridays #188: You Should Want the Market to Go Down

Hi friends. If you were a long-term investor, you should want the market to go down. Not forever, of course, but temporary declines can create some of the best opportunities to build long-term wealth. Please let me explain.

One year ago, headlines were dominated by tariff fears, volatility, and uncertainty. The market had its largest two-day value decline in history, falling by more than $6.6 trillion. Investors were understandably nervous, and many sold their stock, believing that even more losses were coming next. However, fast forward to today, the market is up roughly 30% since that decline.

So, what can we learn from that experience? The biggest lesson is simple but incredibly powerful. Staying invested works. Market declines always feel uncomfortable in the moment. They create fear, doubt, and a strong urge to do something. But history consistently shows that some of the strongest market gains often come during periods of uncertainty, not when things feel calm. Over the past year, investors who stayed disciplined and trusted their plan were rewarded. Not because they predicted the rebound, but because they were already positioned for it.

Lesson number two, the value of having a plan. Moments like last year's decline highlight why a financial plan is so important. A good plan isn't just about projections. It's about preparing emotionally and strategically for volatility before it happens. When you clearly understand your time horizon, your risk tolerance, and your long-term goals, it becomes much easier to stay disciplined when markets get rocky. A plan replaces reaction with intention.

And finally, the third lesson is one that many investors understand intellectually, but struggle with emotionally. Market declines are opportunities. For long-term investors who are still accumulating assets or rebalancing portfolios, lower prices allow them to buy more shares at better valuations. Think about it this way. If you believe in the long-term growth of the market, then lower prices today will improve your future returns. Of course, it rarely feels comfortable in the moment. But over time, buying during periods of fear has often been one of the best decisions an investor can make.

If this past year reinforced anything, it's this. Markets are unpredictable in the short term. Discipline is more powerful than timing. And a thoughtful plan can turn uncertainty into opportunity. Staying invested, and even buying when the headlines are telling everyone to sell, isn't easy. But time and again, it has proven to be one of the most reliable paths to long-term success.

I have been through dozens of these crises and temporary declines over the past 25 years and have seen firsthand just how powerful this strategy can be. Thank you for watching and I look forward to talking with you next Friday morning.