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Amidst the current market noise and uncertainty, a steady perspective becomes more important than ever. This update offers a look at the bigger picture, with reminders of the patterns and resilience that tend to emerge over time.

We’re here for you,

The Copia Team

We as human beings are fatally flawed: we constantly anchor on fear. This is a scientifically-backed phenomenon – the amygdala mediates our fight-or-flight response and tends to magnify the negative at least twice as much as the positive. It’s a built-in defense mechanism that keeps us hyper-aware of perceived threats. Fear of change, fear of the unknown, fear of what’s next … there’s a laundry list of fears to choose from that could be considered a perceived threat right now. Unfortunately, in the Information Age, we are under a constant barrage of data (factual or not) and opinions (informed or not), too often packaged and delivered in a way to exploit our fatal flaw.

What has happened over the past four trading days in global markets is a function of that fear. Markets are largely a reflection of human behavior. And like humans, markets do not like the unknown. If you’ve read any of my previous publications, I like to highlight topics or buzzwords that we are hearing a lot – whether in the media or in client conversations. The financial news buzzword of the day is “tariffs,” and let’s just say that the“unknowns” surrounding the recently unrolled policies around them are …extensive. If you’ve been a Copia client for long, you’ve likely heard anyone on our team say: markets can obviously take good news very well, and they can surprisingly take bad news fairly well, but what they can’t handle well a tall is the unknown. The current volatility is a clear reaction to the uncertainty around the scope, enforcement, and global impact of these tariffs.

Unfortunately for investors, there is no shortcut (there never is) to get to the right answer to the question: “What happens next?” The best—and most difficult—thing we can do is try to remove emotion from the equation and look at things through an objective lens. There are several ways you can do this, but for me, the best bang for my buck is to look at historical data. Here are some objective historical facts that you may, or may not, already know but are helpful reminders in times like these:

1. Significant stock market declines happen every year—and they all have one thing in common: a complete recovery with time.

2. Not every pullback is the same—on average:
   a. 5%+ pullbacks happen about three times per year

   b. 10%+ corrections occur roughly once per year, and

   c. 20%+ “bear market” declines occur every 6 years

3. We have now had four bear market declines in the past 7 years—and the S&P 500 Index has still delivered a 9.73% annualized return during that time (as of the close on April 7, 2025).

4. The VIX index closed above 45 on Friday (VIX is a measure of market volatility through the options market, better known as a gauge of “fear”)—which is among the highest volatility readings in history. Whenever the volatility has been this high in the past, stocks have substantially outperformed over the next 1-5 years … 100% of the time.

5. CNN’s “Fear & Greed Index” dropped to a reading of 4 on Friday—the index uses a simple 100-point scale (from extreme Fear to Extreme Greed), and this reading is the second-lowest all-time behind only a reading of 2 on March 12, 2020 … the market bottomed just 11 days later.

I can also objectively say that we don’t know when this particular market volatility and decline will come to an end – I wish I did! What I can say with confidence, though, is that moments like this, while uncomfortable, are a normal part of the investing journey. If you’re on the younger side, take heart. Historically, periods like this are a gift. To the extent you’re able to save with each paycheck—or regularly contribute to a retirement plan or other investment account—keep going. This is when long-term investors build the strongest foundations. Volatility like this is exactly why stocks deliver higher returns over time.

For those at or near retirement, I know this kind of environment can be especially nerve-wracking. But there’s a reason your portfolio includes things like bonds and precious metals. Over the past few years, it may have been tempting to question their purpose—now it’s becoming clear. If your portfolio is properly allocated, you have more than enough unstable assets in your portfolio to get you through the next few years of lifestyle needs. The odds are overwhelming that the equity markets will reach new highs before you need to draw on the stock portion of your portfolio.

For most investors, here’s the truth:

99% of good investing is doing nothing.

The other 1% is how you behave when the world feels like it’s going crazy.