It is certainly easy to get a bit rattled when you open up yahoofinance.com and see words and phrases like “September swoon,” “stocks pummeled,” “worries mount,” “panic,” “bear market,” “heavy losses,” and “sick market” being used to describe ongoing market volatility.
At the time of writing, the SPDR S&P 500 ETF (ticker: SPY) is in a 9.4% drawdown. To put this into perspective, fixed income investors would have experienced larger dips from 2007 to present by investing in 7-10 Year U.S. Treasuries, investment grade municipal bonds, or a mutual fund or ETF tracking the Barclays Aggregate Bond Index. Investors in investment grade corporate bonds – hardly considered a risky investment – lost more than double SPY’s current 9.4% drawdown in 2008.