Maybe now investors will realize how good we had it in 2023 and 2024.

Those back-to-back years of 20%-plus returns and minimal volatility suddenly feel like a distant memory. Financial fears and recession risks have risen considerably in recent months, bringing with them a sobering reminder that stocks do not always rise.

The S&P 500 fell 20% from its Feb. 19 peak to its April 8 low. Corrections and bear markets are part of investing, but living through them is even more painful when the losses occur so rapidly. The first 10% of this latest decline (from Feb. 19 to March 11) was the fifth-fastest correction in the past 75 years.

After a period of relative calm during the final three weeks of March, we experienced an even faster collapse. In the four trading days from April 3-8, the S&P 500 fell 12.1%. It was the market’s worst four-day period since the COVID-19 pandemic (March 2020). Before that, we have to go back to the Great Recession (November 2008) for such a sharp sell-off.

The CBOE Volatility Index, better known as the VIX, is the most popular tool for measuring market volatility. It reached extreme levels earlier this month, peaking above 60 intraday on April 7 and closing above 50 on April 8.

Volatility, of course, creates opportunity. Since 1990, there have been 74 trading days when the VIX closed above 50. The S&P 500 has been higher one year later in every single instance.

Equities are not the only asset class suffering from whiplash. Bonds have been exceptionally volatile in recent months as well. Ten-year U.S. Treasury yields reached 4.66% in mid-February, around the time stock prices peaked. Yields fell all the way to 3.89% on April 4, then snapped back to 4.6% last week.

Such violent swings in interest rates can have a big impact on the price of long-duration bonds and bond funds, which is something investors need to keep in mind. Most people are surprised to see such large fluctuations from the “conservative” part of their portfolios.

With yields back on the rise, bonds are again worth considering for anyone with cash on hand. A seven-year ladder of investment-grade corporate bonds is paying close to 5% per year. For those who land in the top income tax brackets, a similar ladder of high-quality Minnesota municipal bonds has taxable-equivalent yields of more than 7%.

Tariffs remain front and center when it comes to short-term drivers of market performance. Markets dislike uncertainty, and a constantly changing wave of tariffs seems a perfectly unpredictable policy. President Donald Trump did grant investors a temporary reprieve by announcing a 90-day pause to the implementation of his “reciprocal tariffs,” then exempting certain products like computers and smartphones. But his administration’s long-term economic policy remains entirely unclear, and that lack of clarity means market volatility will likely remain elevated.

Policy is not the only culprit triggering volatility. Many of the mega-cap technology stocks with outsized market influence entered 2025 trading at especially rich valuations. Six of the “magnificent seven” tech stocks have lost more than the S&P 500 year-to-date. Federal government reform (think: Elon Musk’s DOGE) and lingering inflation concerns are playing a part as well.

As of Thursday, the S&P was down 14% from its February peak. It’s human nature to wonder if the benchmark might retest its recent low, but selling during times of extreme volatility rarely works out well. The best days and the worst days tend to cluster together, so trying to avoid the downside means you risk missing the upside, too.

Investors who feel compelled to “do something” should focus their attention on buying stocks while they are lower or locking in bond yields while they are higher. Right now, they have the opportunity to do both.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.