So far, 2014 has been a volatile year for the stock market. The S&P 500 has gone from its all-time high of 1,850 on January 15 to a low of 1,737 on Wednesday.
This is a brutal 6.1% intra-year decline. For the year, the S&P 500 is no down 5.2%.
However, these big intra-year drops are very typical of the markets.
Check out this chart from JP Morgan Funds' David Kelly. According to Kelly's research, the average largest annual intra-year drop since 1980 is a whopping 14.4%. This makes this year's sell-off look minuscule.
More importantly, annual returns during these years have been positive 26 out of 34 times.
Yes, the recent volatility hurts. But it's no reason to freak out.
JP Morgan Funds