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No one wants to see a rollback. But we all know it occasionally happens.
As of February 20, 2026, the all-time high for the Vanguard S&P 500 ETF (VOO) is about $642.
If we experienced a decline from that level:
That’s how markets work. A severe headline event often rewinds prices months — sometimes a year or two — but rarely decades.
In real time, a 30% decline feels like collapse. On a chart, it’s a return to where we once stood not long ago — a time that probably didn’t feel catastrophic at all.
So here’s the question:
How do you feel about rolling back a few months? A year? Two years?
For long-term investors, volatility is not destruction. It’s a reset. A rewind before the story resumes.
No one wants to see it happen. But if we know what a 20%, 30%, or even 40% drop truly represents — a return to recent history — it becomes less of a mystery and more of a normal, if uncomfortable, part of the journey.
I wouldn’t be crazy about a big fallback, but it’s why I rebalance periodically according to my IPS. Pruning my gains helps reduce impacts from a correction when it happens, though it also mutes potential gains should markets continue to run up. I subscribe to the thought that “pigs get fat, but hogs get slaughtered”…
As a retiree, I feel ok about an extended market correction/recession. I maintain 24-30 months cash and have a portfolio with appropriate fixed income and equity investments. The income from the investments should be able to refill cash positions for an extended period so I won’t have to sell stock or bond positions for losses.
For those still working, increasing your emergency fund and discussing defensive moves with your advisor would be appropriate. Broadening taxable brokerage accounts to less tech and more index/value/international holdings may be appropriate. Exchanging stocks for bonds doesn’t make much sense based on holding bonds in a taxable account isn’t tax efficient. Munis performance generally isn’t great but may provide a temporary buffer. Having said all that, I was 100% equities until retirement and, with a little luck, did ok. It’s time in the market, not timing the market that produces the best long-term results.
How do you feel about rolling back a few months? A year? Two years?
I didn’t sweat the lost decade, 2000-2009. At the time, we were shifting our savings into high gear, so benefited from the debacles . Now fully retired, and thanks to articles like this one, as well as the great comments, we have a new strategy in place for the inevitable hard markets.
I’m reminded of COVID when the Dow went from like 25K to 17K. I heard people talking about now was the time to invest. What, you suddenly have that much cash sitting around now, but you didn’t have it when the Dow went through 17K the first time maybe a couple of years ago?