Fidelity Study Finds S&P 500 Gains After Market Drops

Fidelity Investments conducted a study analyzing S&P 500 returns over a 70-year period to determine the impact of market corrections and bear markets on long-term performance. The data shows that the index returned an average of 30% over the year following the bottom of a correction between 10% and 19%.

Returns were even higher after more severe downturns. The analysis found that the S&P 500 averaged 37% returns in the year following bear markets of more than 20%.

The findings suggest that while sell-offs reduce immediate portfolio values, they allow long-term investors to accumulate more shares at lower prices. This strategy can enhance overall gains during the eventual market recovery.