Storm After the Calm?

Unsurprisingly, markets have shown more volatility in 2025 after back-to-back years of 20%+ returns. The S&P 500 has already fallen more than 5% from its all-time high amid concerns over economic growth, inflation, and tariffs. While a deeper sell-off is possible, history suggests that in over 65% of cases, the market fully recovers without going down more than 10%. However, about 35% of the time, declines extend into a correction, and in 17% of cases, they lead to a bear market. 

With our disciplined RiskFirst^® approach to investment management, we don’t try to guess what the market is going to do. We follow a disciplined, research-driven process to manage risk unemotionally, helping you stay the course with your long-term financial plan.

Storm After the Calm?

What Occurred Following a S&P 500 drawdown of -5%

Source: Bloomberg, Redwood. Data as of 3/6/2025. Date range from 1928 - 2024.

Regards,

Allgood Financial

Disclosure: This piece is for informational purposes only and contains opinions of Redwood that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no representation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. The objectives mentioned are not guaranteed to be achieved. Investors cannot invest directly in any of the indices mentioned above. Diversification of asset class is not a guarantee against loss. RiskFirst^® is a registered trademark of Redwood Investment Management, LLC.

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