The media offers plenty of reasons to worry. The ongoing conflict in the Middle East, AI rendering human workers obsolete, rising energy costs, the list goes on and on. If you’re investing for the long run, know that headlines will consistently try to pull you off course. Remember why you’re investing: You’re aiming to grow your dollars today to ensure you can maintain (or even grow) your spending power in the future. The rollercoaster of owning equities is rewarded with greater returns and spending power in the future.

Understanding the risk and reward of investing can be challenging. The finance industry likes to use terms like Beta or Standard Deviation. While these are statistically sound measures, most people would be hard-pressed to provide a clean and clear definition of what they mean, or how they’re calculated. Even most advisors would struggle to provide accurate definitions on the spot.

We try to communicate in Human terms with our clients, and we’ve built some charts and graphs to help communicate that. Given the current concerns and headlines, I think this is a great time to showcase some of our favorite graphs.

This is one of our favorite graphs. It's always easier to see that yesterday's worries weren't as scary once they're in the rearview mirror. Even through the Dot-Com bubble bursting, the 07-08 global financial crisis, and the COVID-19 global pandemic, stocks have risen. While we may not know the length or extent of a given market downturn, we do know companies have historically navigated challenges and delivered positive returns to long-term investors. We expect that resiliency to continue.

Introducing Intra-Year Declines

Markets rarely move in a straight line. Even in strong years, there’s almost always at least one significant drop along the way — what we call an intra-year decline. It measures how far the market fell from its highest point before it started recovering. As you can see in the chart below, intra-year declines have occurred every single year in the S&P 500 since 1990.

As I’ve written previously, the stock market is biased towards delivering positive returns. Most calendar years, stocks are up. This graph speaks to the lived experience of investors: every year has a downturn, no exceptions. I’m sure each downturn felt reasonable but worried investors at the time. No investor from 1990-2025 was immune from seeing their portfolio go down. Those who stuck with it saw positive returns in over 80% of those years.

Even amidst recent headlines, the market’s behavior has been typical. The S&P 500 dropped roughly 9% from its January peak to its March low. This is well within the normal range of market volatility where intra-year declines of 10% or more are common.

Most investors don’t own 100% equities, so it’s important to understand how introducing bonds can reduce risk. 60% equity and 40% bonds (60/40) is a common allocation because it tends to be a sweet spot between positioning your portfolio to grow and reducing risk enough to weather the volatility. Knowing where your asset allocation should be and when is an important, personal, complicated conversation that should involve a financial planner.

As you can see, while shifting from stocks to bonds doesn’t eliminate downturns, it certainly lessens them. Higher returns tend to come with more ups and downs, while smoother rides usually mean lower long-term growth. There’s no perfectly safe way to grow your dollars faster than inflation, so risk is always going to be part of your investment strategy. The key is finding the right balance between how much risk you’re comfortable with and how much risk you actually need to take to reach your financial goals.

Making plans that last

Anytime we’re designing a portfolio at Human Investing, we’re trying to make decisions we’d be okay with over the timeframe that matters for YOUR goals. That doesn’t mean we don’t revisit or adjust, but we’re not trying to make short-term tactical moves. We know outsmarting the market is incredibly difficult to achieve. We’re planning for our clients’ lifetime, not the next 6 months. We want to ensure our clients are positioned in a way where they are capturing the growth necessary to reach their financial goals, while having enough safety they don’t panic because of a temporary downturn.

No matter how you think about risk, there are a few enduring truths. Stocks are a volatile investment, but they’ve historically been a great growth engine in the long run. Whatever headline or concern today will feel much smaller in the rearview mirror.  

Your financial plan and investments are meant to serve you over your entire life, not the current news cycle. There will be times when it makes sense to revisit your allocation, especially when your personal circumstances change. Those decisions should be driven by your goals, not the headline of the week.

We’re always happy to have conversations to help you understand how your allocation is set to fit your needs. Call us at 503-905-3100, or email hi@humaninvesting.com.

---

Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and are subject to change. There is no guarantee that these views will be realized. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes (including the S&P 500 and blended stock/bond allocations) are for illustrative purposes only, are unmanaged, and do not reflect the performance of any specific investment or client account. Index returns do not reflect the deduction of fees or expenses. Historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Asset allocation and diversification strategies do not ensure a profit or protect against loss. Advisory services offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles

Recent developments in the Middle East have once again drawn attention to oil markets. When tensions rise in regions responsible for a meaningful share of global energy production, investors naturally begin to ask how higher oil prices might influence the broader economy and financial markets.

Before discussing the financial implications, it is important to acknowledge the human side of these events. Conflicts like this affect families and communities around the world in ways that extend far beyond markets and economics.

Still, it’s natural for investors to wonder how disruptions in energy markets might affect their investments. Our aim is to provide context that can help frame those concerns.

Why do oil prices matter so much?

Energy plays a central role in the global economy because oil sits near the beginning of the production chain for many industries. It powers transportation networks, supports manufacturing, and is embedded in the production of everyday goods ranging from food to plastics and chemicals. When oil prices rise quickly, those higher costs move through supply chains and eventually reach businesses and households in the form of higher prices.

History shows that sharp oil spikes have often coincided with periods of economic stress, though they are rarely the sole cause.

It is understandable that headlines often focus on oil during geopolitical conflicts. When energy costs rise quickly, pressure on the broader economy can follow.

Geopolitical conflicts often bring uncertainty to both energy markets and financial markets. We explored how markets historically respond to war and global conflict in a previous piece, which you can read here: War and the Market: What Does History Teach Us?.

Why today’s energy landscape is more resilient

Looking at several decades of data provides helpful perspective when considering why the economy may respond differently to oil shocks today.

There is useful context when looking at global oil supply. The United States now produces roughly 20% of the world’s oil, while Iran accounts for about 3–5%. That balance looked different during earlier oil shocks. In 1979, Iran produced close to 10% of global supply, while the United States accounted for roughly 15%. This shift means the global energy system is more diversified and less dependent on any single region than it was during past crises.

Households also appear to have more buffer against rising fuel prices than in earlier periods. One measure economist often watch is how much households spend on gasoline relative to their income.

Historically, economic stress has tended to increase when gasoline spending rises above about 5% of household income. Today that figure sits closer to 2–3%, suggesting households, broadly, have more room to absorb fluctuations in energy prices than during past oil shocks.

The chart below illustrates how gasoline spending as a percentage of household income has changed over time and why economists often watch this measure during periods of rising oil prices.

Shaded areas indicate U.S. recessions.
Source: U.S. Energy Information Administration, Bureau of Economic Analysis, Federal Reserve Bank of St. Louis

Finding Your Footing During Energy Market Volatility

Periods of geopolitical uncertainty often bring volatility to both energy markets and financial markets. Oil prices can move quickly as investors react to changing expectations about supply and demand.

For investors, the more relevant question is how these developments influence their financial plan.

At Human Investing, portfolios are designed with a range of economic environments in mind. Energy price shocks, while disruptive in the short term, represent only one of many forces that influence markets over time. Diversified portfolios allow different parts of the market to respond differently as economic conditions change.

For example, companies that rely heavily on fuel may face higher costs when energy prices rise, while energy producers may benefit from stronger prices. These adjustments tend to occur within the market rather than outside it.

Because of this, our focus for investors remain on their broader financial plan, investment timeline, and overall diversification.

Oil markets may move quickly in response to geopolitical events, yet long-term investment outcomes are shaped by many forces over time.

---

Disclosure:
This material is for informational and educational purposes only and is not investment, legal, or tax advice. References to historical events or market trends are illustrative and do not guarantee future results. Investing involves risk, including possible loss of principal. This commentary does not constitute a recommendation to buy or sell any security or adopt any investment strategy. Human Investing, LLC is a registered investment adviser; registration does not imply a certain level of skill or training.

Sources
Energy Institute. (2024). Statistical review of world energy 2024.
Graefe, L. (n.d.). Oil shock of 1978–79. Federal Reserve History.
U.S. Bureau of Economic Analysis. (2026). Disposable personal income (DSPI). Retrieved from FRED, Federal Reserve Bank of St. Louis.
U.S. Bureau of Labor Statistics. (n.d.). U.S. Bureau of Labor Statistics.
U.S. Energy Information Administration. (2026).U.S. product supplied of finished motor gasoline (thousand barrels per day).

---

Related Articles

After a great run, what should investors expect next?

Every year starts the same way. A fresh set of market forecasts arrives, confidently predicting what stocks will do next. And every year, markets remind us how unreliable those predictions can be.

Even professionals struggle to get it right. In both 2023 and 2024, most Wall Street forecasts underestimated the actual returns of the S&P 500. Markets have a long track record of defying expectations.

This is why long-term investors shouldn’t build portfolios around short-term predictions. Markets move faster than forecasts can adapt. Instead, focus on building portfolios that can compound through a wide range of environments. Still, expectations matter. When investors have a reasonable sense of what outcomes are possible, it’s easier to stay invested when markets don’t behave the way headlines suggest they should.

So as we look ahead to 2026, the useful question isn’t “Will the market keep rallying?”, It’s “What’s reasonable to expect after a strong run?”

The last few years were not normal

It’s hard to overstate how unusual the period from 2020 through 2025 has been. 

A global pandemic shut down large parts of the economy. Inflation surged to levels not seen since the early 1980s. The S&P 500 suffered its worst calendar year since 2008 in 2022. Trade policy and geopolitics added ongoing uncertainty.

And yet, by the end of 2025, the S&P 500 was up nearly 18% for the year. 

When you zoom out, recent returns stand well above long-term averages. Over the past 1, 5, and 10 years, the market has delivered results that are meaningfully better than its 50-year history.

That’s great news for investors. But it also creates a subtle challenge. Strong recent returns have a way of adjusting expectations. What was once exceptional can start to feel normal, even when it isn’t.

Historically, periods of above-average returns are often followed by more moderate ones. Not because markets “owe” us anything, but because starting valuations matter. After a great run, future returns tend to look more ordinary.

The return expectations shown above are derived from publicly available third-party capital market outlooks and represent long-term estimates, not predictions or guarantees. These assumptions are not specific to any individual investor, do not reflect advisory fees, taxes, or other costs, and may differ materially from actual future market results.
[1] Vanguard, Vanguard Capital Markets Model Forecasts, January 22, 2026
[2] Schwab, What’s the 10-Year Outlook for Major Asset Classes?, June 6, 2025
[3] Fidelity, Capital Market Assumptions: A Comprehensive Global Approach for the Next 20 Years, August 2023
[4} BlackRock, Capital Market Assumptions, November 13, 2025

Why “lower” returns aren’t a bad outcome

Many long-term forecasts for U.S. stocks over the next decade fall in the mid–single-digit range. Compared to recent experience, that sounds disappointing. Compared to history, it’s typical.

This is an important distinction. Lower-than-exceptional returns are not the same thing as poor returns. Compounding still works at 5%–6% per year. It just doesn’t feel as exciting when you’re coming off a stretch of double-digit gains.

Experiencing more typical equity returns isn’t inherently an issue. It’s planning as though the unusually strong results of the past decade will repeat that can cause problems.

Why planning matters more than forecasting

For investors saving toward retirement or already retired, expectations matter because small differences compound over time. When returns are more typical, the margin for error narrows. This is exactly where comprehensive planning becomes most valuable.

At Human Investing, we don’t try to outguess markets or build portfolios around forecasts. That means emphasizing diversification, discipline, and resilience rather than reacting to short-term narratives. Our focus is helping clients make better decisions around the things they can control, including how investments interact with taxes, cash flow, retirement timing, and spending choices.

When returns are strong, almost any strategy can feel successful. A well-built financial plan shows which levers impact results, how much flexibility you have, and what adjustments are worth making if conditions change.

Markets will always surprise us. A good plan is designed so those surprises don’t derail long-term goals. That’s the role planning plays in our work, not as a prediction tool, but as a framework for making sound decisions across many possible market outcomes.

Sometimes having a sense of what may be coming can help stay calm during tumultuous times. Lets take some time to review some of the major topics that could cause investors stress in 2026. Good or bad, some version of these topics and the uncertainty around them is reflected in the market today. As more information comes out as time passes, that uncertainty converting into knowledge will cause prices to update. It’s unlikely these will be unforeseen surprises that cause major market movement.

Major 2026 topics we’re watching

Can The Fed maintain its independence?

The Federal Reserve (aka “The Fed”) is in interesting territory. With the attempted dismissal of Fed Governor Lisa Cook, and Department of Justice Investigation, The Fed’s independence is being challenged in new ways. The administration has made their desire for lower rates faster clear. The Fed’s challenge is ensuring rates don’t get too low and stoke inflation.

As unpleasant as it can feel at times, an Independent Fed is a healthy influence on the US economy in the long run. Being willing to raise rates to slow economic activity in the short term to control inflation is an important and painful process. The great challenge of high inflation is it makes any cost today for gains in the future incredibly difficult to make feasible. The lowered investment eventually drags on an economy’s long term growth prospects.

What will AI do to the economy?

No matter where you look, the biggest question for markets and the economy all center around AI. We recently wrote about why the AI boom is different than the dot-com bubble. We do know the upfront costs to build the infrastructure necessary for AI are large. The big concern for investors is the payoff of these AI related investments. If the costs are never fully recovered by increased revenue, companies that are booming today because of their AI investments may end up falling.

What does a modern workplace look like?

Another theme looking at 2026 forecasts: The labor market is going to be an area to watch. With immigration slowing and the aging of the baby boomer generation into retirement, the workforce size is expected to hold relatively steady. The uncertainty of the tariff environment has made long-term decisions outside of AI difficult for companies to navigate. The promise of AI is to enable workers to do more, and so in theory a given company will need fewer people to accomplish a similar amount of work. All this has led to employers generally being less motivated to hire. There aren’t necessarily large layoffs incoming, but hiring may slow enough to increase unemployment slightly.

Staying invested still matters most

The past several years have been exceptionally good for investors. After a run like that, it’s reasonable to expect a more typical environment going forward.

There will always be reasons to sell. There will always be headlines that make staying invested feel uncomfortable. But investing has never required perfect conditions to work.

If you’ve stayed invested through the last 5 to 10 years, you’ve already benefited from an unusually strong period. The next chapter may look different, but the discipline required doesn’t change.

The goal isn’t to predict what 2026 will bring. It’s to own a portfolio that doesn’t need predictions to succeed.

---

Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and may not materialize. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes, historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Advisory services offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles