Beware the Fear-Mongering Headlines: A Stock Market Meltdown Isn't Imminent

investing.com:

In the face of looming recession fears and persistently dire predictions, the U.S. economy has managed to demonstrate remarkable resilience.

With an annual GDP growth of 4.9% in the third quarter, even amid one of the most aggressive rate hike cycles in decades, the economic outlook contradicts the gloomy forecasts that had previously unnerved investors.

This begs for a closer examination of stock market returns over the past decade to gain a more balanced perspective on the prevailing situation.

Over the past decade, the S&P 500 has exhibited remarkable growth, surging by more than 200% at an average annual rate exceeding 10%. However, this journey hasn't been without its share of setbacks.

The global pandemic triggered a swift 34% decline in just over a month, and we witnessed another 25% dip last year due to the inflationary climate.

Additionally, in recent months, the market has experienced a roughly 10% retracement from the highs of July.

While it's true that the market is prone to sharp declines at various points, which is statistically normal, the overall trajectory remains upward.

Stocks tend to consistently yield significant gains in the long term. To achieve long-term investing success, it's crucial not to be swayed by perpetual predictions of impending crashes.

More often than not, such forecasts position us on the wrong side of the market trend. If we examine the data since 1950, bear markets have accounted for approximately 17% of the time.

On average, U.S. indexes experienced a 10% decline from all-time highs. Year-to-year returns have surpassed 10% more than half of the time.

Over a decade, the stock market has risen about 97% of the time, and year-to-year, it has climbed 75% of the time.

In addition, the