Using history as our guide, the average intra-year decline is about 15%.  This is measured from the highest point in a calendar year to the lowest point before recovery. (See our Intra-year Price Decline chart here)

It is worth pointing out that every few years we get price declines greater than 20%.  Since World War II we have experienced 18 of them by my count.  The average of these price declines is somewhere around a third off the high. (See our Bear Market chart here)

Just so you know, I cannot predict when the next price decline will start, how far it will drop or when it will recover.  No shame in this.  No one else can do it consistently either.

It is the nature of these declines and the inability to time them that is the reason behind our diligence in keeping your wealth planning up to date.

Of course, during these price declines we can usually count on the financial media to scream from the mountain tops that the sky is indeed falling, and the apocalypse is near.

The reality is that once prices have declined 20%, the worst is usually behind us.  The average duration between 20% down to the trough for the cycle from World War II is about six months.

So how much will the price of the stock market drop in 2026?  I suggest we prepare financially and emotionally for one of those 33% declines.  As Covid illustrated in 2020, sharp market declines can come out of nowhere.  The good news is with proper diversification, quality investments and the right amount of savings  – we can navigate volatility together.

Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The report herein is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.

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