Recovery Often Comes Hard on Heels of Market Pullbacks

Understanding volatility

Historically, significant stock drawdowns have been followed by stock rebounds. Over the past 50 years, every market pullback of at least 15% has seen a subsequent snapback in the following year. Indeed, the average 12-month return of 39% is greater than the average pullback of 30.2%.

Rebound Town

Rebound Town

Stock market pullbacks typically see near-term recovery

12-month S&P 500 returns after pullbacks of at least 15%, 1975-present

Horizontal bar chart of historical market pullbacks and subsequent 12-month returns (1976–2022). Blue bars show pullbacks ranging from –19% to –57%, orange bars show following returns from 12% to 74%. Average 12-month return after a pullback is 39%.

Source: S&P 500 Index. Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Indexes are unmanaged and cannot be invested in directly.

The Upshot

Short-Term Volatility Shouldn’t Spook Long-Term Investors

Volatility can be uncomfortable, and market swings are unavoidable for long-term investors. The key is to not let these periods of unusually weak—or unusually strong—returns drive decision-making. Avoid emotional reactions to market movements and stay the course for the long term.

Your Next Step Reach out to an expert

Diversification and a long-term perspective can help you navigate bouts of short-term volatility and remain focused on the potential snapback. Your advisor can help.

Learn more
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Russell Investments' ownership is composed of a majority stake held by funds managed by TA Associates Management, L.P., with a significant minority stake held by funds managed by Reverence Capital Partners, L.P. Certain of Russell Investments' employees and Hamilton Lane Advisors, LLC also hold minority, non-controlling, ownership stakes.

Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the "FTSE RUSSELL" brand.

© Russell Investments Group, LLC. 1995-2025. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an "as is" basis without warranty.

First used: July 2025. RIFIS-26578 [EXP-06-2026]