Long-term growth requires waves

For many investors, market swings feel like a sign that something is broken. In reality, volatility is the reason long-term growth exists. Without movement, there is no opportunity—only stagnation.

Think of investing like paddling a canoe in Hawaiian waters. No one launches expecting glass-flat conditions. Trade winds shift, swells roll in from distant storms, and channels bring cross-chop. These forces don’t mean something has gone wrong; they are simply part of moving forward.

The goal isn’t to eliminate the waves. It’s to prepare for them by viewing your portfolio as a well-built vessel designed for endurance, not a daily scoreboard.

Lessons from the rough water

History shows us that while the water often looks rough, disciplined investors historically have thrived by staying the course.

1. The 1987 “Black Monday” crash

On October 19, 1987, the Dow dropped 22.6% in a single day— among other factors this was a technical shock tied to early automated trading.

The lesson: If you jumped out of the canoe that morning, you may have locked in a massive loss . If you stayed seated, the market recovered to break even within 15 months. The current historically continues forward.

2. The “lost decade” (2000–2009)

Between the dot-com collapse and the Great Recession, the S&P 500 delivered essentially zero return for ten years.

The lesson: Preparation matters. Investors with cash reserves didn’t have to abandon their long-term holdings to cover living expenses. By 2013, those who stayed invested were reaching new highs.

3. The 2020 “flash crash”

During the COVID-19 outbreak, markets fell 30% in just 22 days—the fastest decline in history.

The lesson: The rebound was just as powerful; by year-end, markets were up 16%. Market timing requires being right twice—when to exit and when to re-enter. Very few catch both.

4. The April 2025 tariff shock

Last year, markets rattled after the announcement of broad U.S. tariffs, causing an 11% drop in two days. Headlines warned of a trade war, but by mid-May, the losses were recovered as policy rhetoric and actions softened.

The lesson: Short-term waves are driven by emotion, not fundamentals. Investors who abandoned the canoe turned a temporary swell into a permanent setback.

Navigating today’s environment

It’s natural to feel uneasy when markets react to geopolitical headlines, such as recent tensions involving Iran. When the news cycle intensifies, volatility feels personal.

However, markets rarely wait for clarity. They often react to uncertainty by overshooting in both directions. Geopolitical events may stir the surface, but they rarely redirect the long-term current of global economic growth.

Remember these anchors:

• Fluctuations aren't losses: Until you climb out, price changes are not changes in your destination.
• Built for open water: Diversification assumes trade winds and the occasional storm.
• Income continues: Even in choppy water, many companies continue to generate earnings and pay dividends.
• Recovery is the historical norm: Markets have moved through wars, pandemics, and political standoffs. Disciplined investors have been rewarded for patience.

The ocean may feel unsettled right now, but your canoe is steady and the horizon hasn't moved.