01 Perspective first
This is the weather, not the end of the world
Falls are not a malfunction of the market. They are the market:
- Dips of 5% happen several times in a typical year.
- Corrections of 10%+ have arrived roughly every year and a half.
- Bear markets of 20%+ have come around every six years or so, falling about a third on average and lasting under a year — while the bull markets between them ran longer and climbed far more.
- Even so, the market's average within-year drop is around 14% — and about three-quarters of those years still finished positive.
Volatility isn't the fee you pay for doing something wrong. It's the admission price for returns that beat the bank — and the reason those returns exist at all. If markets never frightened anyone, they couldn't pay anyone either.
02 The record
Every crash so far has ended — here's the full list
| Crash | Fall | What happened next |
|---|---|---|
| Dot-com bust 2000–02 | −49% | About seven years back to the old peak — the slowest modern recovery. Faster counting dividends. |
| Global Financial Crisis 2007–09 | −57% | Around five and a half years to recover in price — roughly a year faster with dividends reinvested. |
| COVID crash 2020 | −34% | Fell in 33 days; back at all-time highs in under six months — the fastest recovery on record. |
| Inflation bear 2022 | −25% | New all-time high about two years after the previous peak. |
US large-cap equities (S&P 500), peak to trough. Closer to home: the Asian Financial Crisis of 1997–98 cut Singapore's own index by roughly 60% — while broad US and global markets barely flinched. That's the case for owning the world, not one small market.
Notice what's not in the table: a crash that didn't end. Even someone with the worst timing in modern history — investing a lump sum at the exact peak of 2007, staring at a 57% loss eighteen months later — ended up earning close to the market's long-run average return by simply not selling.
"It's always recovered" describes broad, diversified markets — thousands of companies across the world. Individual stocks, single countries and fashionable themes can fall and stay fallen. This page's reassurance applies to the boring, diversified portfolio, which is one more argument for holding one.
03 The real danger
The expensive move isn't the fall. It's leaving during one.
The damage in a crash is mostly self-inflicted, and it happens in two steps: selling near the bottom, then waiting for it to "feel safe" — which is precisely when the recovery happens without you.
- Missing just the 10 best days over twenty years roughly halves your ending wealth. Miss the best 50 or 60 and most of the return is gone.
- Those best days hide inside the storm: the great majority land during bear markets or in the first weeks of recovery — before any headline says it's safe.
- In the 2008 crisis, retirement savers who sold out near the bottom and stayed out had barely moved two years into the recovery — while those who held were up by half.
- Across a decade, the average fund investor earned 7.0% a year while the funds they held returned 8.2% — a gap made almost entirely of buying high and selling low.
You don't have to outsmart a crash. You just have to still be in your seat when it ends — and the entire game is making sure nothing forces you out of it early.
04 The checklist
What to actually do this week
| Do | Why |
|---|---|
| Nothing, with the portfolio | The plan was built knowing this would happen. Red is the plan working under stress, not the plan failing. |
| Check your foundations, not your prices | Emergency fund intact? Income steady? Insurance in force? If yes, the fall has changed nothing about your life. |
| Let the automation keep running | Your monthly investing is now buying the same assets at a discount. Pausing it is selling the recovery. |
| Stop checking daily | Nothing useful happens on a screen you refresh hourly — except to your sleep and your resolve. |
| Talk before you act, not after | If the urge to sell is winning, that conversation is literally what I'm for. One call before beats ten regrets after. |
If money you need within the next two or three years is sitting in equities, that's a structure problem the fall has exposed — not a timing problem to solve by guessing the bottom. Fix the structure: near-term money belongs in safe, liquid places, so the invested rest can be left alone to do this exact thing.
05 The quiet upside
If you're still buying, red is a discount
One group should quietly welcome a falling market: anyone still decades from spending the money. Every dollar you invest this month buys more of the same businesses than it did last month. The worst decade to live through as a saver is often the best decade to have been buying through.
And if you're near or in retirement, this is why the plan holds years of spending outside equities — so a red year is an inconvenience to your portfolio, not to your groceries.
If the nerves are winning
This is the moment I'm actually for
Anyone can be a co-pilot in clear skies. The entire value of having a partner on your side of the table shows up on the red days — running your numbers, checking your foundations, and keeping you in your seat when everything in you says jump. Reach out before you act →
Sources & notes
Long-run figures; written to stay true across cycles. Average intra-year decline (~14%) and share of positive years: J.P. Morgan Guide to the Markets. Frequency of 10% and 20% declines: Capital Group, S&P 500 1954–2024. Bear market averages (~35% decline, under a year, 1928 onward): Hartford Funds / Ned Davis Research. Crash depths and recovery dates: S&P 500 public records; dividend-inclusive recoveries were roughly a year faster for the GFC and dot-com. Missing-the-best-days and their clustering (most fell in bear markets or early recovery): J.P. Morgan and Hartford Funds studies. 2008 sellers vs holders: Fidelity 401(k) records, 2008–2011. Behaviour gap (7.0% vs 8.2% over the decade to 2024, US funds): Morningstar Mind the Gap 2025 — the exact size is debated, the direction well established. Asian Financial Crisis (~60% fall in Singapore equities): National Library Board Singapore. Staying invested and dollar-cost averaging over market timing is also the position of MoneySense, Singapore's national financial education programme.
Past performance is not a promise about the future; "markets have always recovered" is a description of broad diversified indices to date, not a guarantee. General information, not financial advice. Jonathan Wong is a licensed financial adviser representative in Singapore, currently between firms — during that period he is not able to provide financial advice. You can check his registration yourself on the MAS Financial Institution Representatives Register at eservices.mas.gov.sg/rr.