Last week’s market sell-off was hard to ignore. The sharp decline—triggered by newly announced tariffs—left many investors questioning whether now is the right time to be in the market at all. But history tells us that fear-driven decisions often come at a cost, especially when it comes to long-term investing.
Understanding the Recent Market Drop
Following the tariff announcement, the S&P 500 fell 10.5 percent in just two days—one of the steepest drops we’ve seen in decades. For context, this kind of decline has only happened five other times since 1950: during the COVID-19 pandemic, the Great Financial Crisis, and Black Monday in 1987. These were all moments of significant economic shock.
Add to that China’s promise to retaliate with 34 percent tariffs of its own, and investor anxiety has climbed to new heights. The VIX (CBOE Volatility Index), a common measure of investor fear, has spiked to its highest levels since the pandemic—signaling just how uneasy people are about what comes next.
What This Means for the Economy
Right now, markets are reacting to uncertainty. With so much still unknown about how tariffs will be implemented and how global trade relationships will unfold, investors are understandably cautious. Inflation, interest rates, and corporate earnings are all at play—and the range of possible outcomes has widened.
But while the noise can be overwhelming, it’s important to zoom out and consider the bigger picture.
Why Waiting Could Cost You
Moments like these often lead investors to sit on the sidelines, hoping to wait until things “calm down.” But the truth is, by the time markets feel stable again, much of the recovery may already be underway. History has shown us that trying to time the market is not only difficult—it can be costly.
In fact, some of the most attractive investment opportunities have emerged in the middle of market volatility, not after it’s passed. While uncomfortable, sell-offs can be the moments that lay the groundwork for future gains.
Finding Opportunity in Uncertainty
Yes, the current environment is volatile. But volatility isn’t new—and it isn’t permanent. Instead of reacting out of fear, this may be a time to make sure your portfolio still aligns with your long-term goals and to consider rebalancing if it doesn’t. For patient, long-term investors, the potential upside of staying the course—and even leaning in—could be significant.
This material is intended for informational/educational purposes only and should not be construed as investment advice, a
solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for
more information specific to your situation. Authored by Chris Fasciano, chief market strategist at Commonwealth Financial Network®.