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Don’t Panic. The Market Loves a Good Drama.
- Ascend Advisory Group
- Mar 18
- 3 min read
By Kevin Kull, CFA®, MBA, Financial Advisor (LinkedIn)
Yesterday, I tuned into CNBC and was treated to a chorus of alarm bells about recessions and tariffs. It reminded me of my two-year-old son, Charlie, discovering a new word and yelling it on repeat.
Spoiler alert: the pundits don’t know if we’ll hit a recession in the next 12 months.
What we do know? Economies are cyclical. If a recession hits, interest rates will drop, and the economy and markets typically will bounce back stronger than ever. The real key? Don’t panic over your long-term investments.
Stocks are the only thing people don’t want to buy when they go on sale, which Warren Buffet would argue is the antithesis of long-term wealth creation.
Market Corrections: More Common Than Your Morning Coffee. Want proof?
See the full presentation here.
The gold bars represent the biggest market pullback during each year — basically, the worst drop the market experienced at any point. On average, these dips exceed 10%, reminding us that turbulence is a normal part of the ride. The blue bars show the actual return for the entire year, and here’s the kicker: about 80% of the time, the market still ends the year in positive territory.
The lesson? The market throws tantrums, but it tends to finish strong.
The gold bar above, shows the biggest market pullback each year. On average, the market dips over 10% annually, yet 80% of the time, the calendar year ends positive.
The blue bar? That’s the actual return for each year. Spoiler: it’s usually up.
Tariffs & Trade Wars: Business as Unusual
No Crystal Ball: No one knows when tariffs will end, but Trump’s first term offers some clues.
In 2018, tariffs and rising interest rates led to a -6.24% return. Fast forward to 2019, trade deals were struck, rates were cut, and the market roared back with a 28.88% return.
Decision Paralysis: Prolonged uncertainty means capital investment decisions get more complicated. Companies face tough calls as they navigate this rollercoaster.
Winners and Losers: Companies shielded from foreign competition might see a boost, while those reliant on newly tariffed imports or raw materials will feel the squeeze.
"This Time Is Different": Echoes of the Smoot-Hawley tariffs and the Great Depression loom large in trade war debates. The 1930s lacked today’s stabilizing factors like a steady money supply, low taxes, and lighter business regulations, which might soften the blow this time around.
"...if we had kept up at these spending levels that -- everything was unsustainable. We are resetting..." -Treasury Secretary Scott Bessent
As Treasury Secretary Scott Bessent put it on NBC’s “Meet the Press” on Sunday, March 16: “What I could guarantee is we would have had a financial crisis. I’ve studied it, I’ve taught it, and if we had kept up at these spending levels that -- everything was unsustainable. We are resetting, and we are putting things on a sustainable path.”
In short: Don’t let the noise throw you off your game. Market dips are normal, recovery is inevitable, and long-term thinking wins.
Kevin Kull, CFA®, MBA
Financial Advisor, brings nearly two decades of investment expertise, having managed trust portfolios for a large regional bank before advising high-net-worth clients at top private wealth firms. Now at Ascend Advisory, his keen market insights and strategic approach help clients navigate uncertainty and seize long-term growth opportunities.