There’s Always a Reason to Sell—But Should You?

Markets have been rattled in recent months, with fears of tariffs, recession, and inflation dominating headlines. For many investors, it feels like the perfect time to sell, move to cash, and “wait for things to settle.” But history tells a different story—one of resilience, recovery, and long-term rewards for those who stay the course.

The chart above highlights some of the most significant crises and economic shocks over the past three decades. From the collapse of the Soviet Union and the Dot-Com Bubble to the Great Financial Crisis and the first U.S. COVID-19 case, investors have faced countless reasons to panic. Yet despite these setbacks, the S&P 500’s total return has compounded at 10.37% annually, growing over 3,200% since 1989 as shown below.   

A Pattern of Panic and Recovery

Each time markets tumble due to a crisis, uncertainty, or geopolitical turmoil, it feels different. The fears are real, and the headlines are filled with worst-case scenarios. Yet, in every instance shown in the chart, markets eventually rebounded, often reaching new highs. Consider:

• The Dot-Com Bubble (2000-2002): Tech stocks collapsed, wiping out trillions in market value. Investors who stayed invested, however, benefited from the bull market that followed.

• The Great Financial Crisis (2008-2009): The S&P 500 lost over 50% of its value, yet those who held on saw incredible gains in the following decade.

• COVID-19 Crash (2020): A global pandemic sent markets into free fall. By the end of 2020, however, the S&P 500 had already recovered, and the bull market resumed.

Today, fears of tariffs, inflation, and recession loom large. But if history is any guide, selling in response to fear has rarely been a winning strategy.

The Cost of Market Timing

Many investors believe they can avoid downturns by selling at the “right” time and getting back in later. The problem? The best days in the market often follow the worst. Missing just a handful of these days can drastically reduce long-term returns.

For example, an investor who missed only the 10 best days in the market over the last 30 years would have cut their total return in half. The key takeaway? Staying invested through volatility is one of the most powerful strategies for building wealth.

A Time-Tested Investment Approach

At American Financial Management, we believe in disciplined, risk-based investing. That doesn’t mean ignoring risks—it means managing them without making emotional decisions. Instead of reacting to short-term noise, we focus on long-term fundamentals, asset allocation, and personalized financial planning.

So, the next time headlines scream “This time is different”, remember: There’s always a reason to sell. But history shows that those who stay the course have been the ones rewarded in the end.

If you have concerns about your investment strategy, let’s talk. We can help you navigate volatility while staying aligned with your long-term financial goals.