Investing / The Compound Effect
Why You Stay Invested: A 3,000-Point Rally, a Tariff Delay, and the Power of Staying the Course
| 7 min | By Heath J. Harris
Markets jumped nearly 3,000 points after a tariff pause. Here's why staying invested matters and how smart investors lean in when others panic.
Today, the market surged nearly 3,000 points in response to the announcement of a 90-day pause on proposed tariffs. For many investors, this rally came as a shock -- especially those sitting on the sidelines, waiting for "the right time" to get back in.
But if you have been working with a disciplined strategy -- or better yet, with a fee-only fiduciary advisory team that focuses on long-term growth -- you already know:
This is why you stay invested.
The Trigger: Tariffs Delayed
Markets soared on news that a 90-day tariff pause would calm inflation concerns and spark optimism in a market that had been shaky for weeks. While politics can often rattle the market in the short term, this type of reprieve shows how fast markets can react -- and how quickly investors can fall behind if they are not positioned properly.
For our clients at Compound Advisory, from our Annapolis, Maryland base to households we serve virtually across the country, the message was clear: the plan worked.
Market Rallies Do Not Announce Themselves
The Dow jumped nearly 3,000 points in a single session. And here is the problem with trying to time the market:
Most people who tried to "time the bottom" missed it. Most people who thought "I will wait until things calm down" are still waiting. And most of the biggest up days in market history come during periods of uncertainty -- not after it.
This is one of the most important principles in retirement planning: time in the market matters far more than timing the market.
The Staggering Cost of Missing the Best Days
Here is a real-world example of what missing just a few key trading days can do to your long-term returns. Consider $1 million invested in the S&P 500, with growth measured from 1999 to 2023:
- Fully Invested: $7,731,616
- Missed 10 Best Days: $3,542,121
- Missed 25 Best Days: $1,654,515
Let that sink in. Missing just 10 of the best trading days over a 24-year period cut the portfolio value by more than half. Missing 25 best days turned a $7.7 million outcome into a $1.6 million one.
Trying to time the market feels logical. But time in the market -- not timing it -- is what builds wealth.
History Is On the Side of Those Who Stay In
Take a look at the 10 biggest two-day drops in S&P 500 history. Each of these declines felt devastating in the moment -- whether it was Black Monday in 1987, the depths of the 2008 financial crisis, or the COVID crash in 2020. But look at what happened next:
- After the 1987 crash (down -24.6% in two days), the S&P gained +28% in 1 year and +119% in 5 years
- After the March 2020 COVID drop, the S&P was up +44% in 1 year and +127% in 5 years
- After the October 2008 panic, returns over 5 years exceeded +100% in every measured case
What does that tell us? Panic selling almost always leads to regret. Rallies come fast, and recoveries are often stronger than expected. Volatility is not your enemy -- it is your opportunity.
April 2025: A New Entry on the List
The S&P dropped -10.5% in just two days -- now ranked among the top five worst two-day declines of all time. We do not know yet what the 1-year, 3-year, or 5-year returns will be. But based on the historical record, staying invested during these periods has consistently rewarded patient investors.
If history is any guide, staying invested today is designed to look wise tomorrow.
Retired Clients at Compound: Calm, Unaffected, and Covered
At Compound Advisory, our retired clients were not worried about what happened next. Why? Because they are invested using our Compound Cultivator™ framework, which holds 12 to 36 months of cash or cash-like assets, providing:
- Stable retirement income during downturns
- Protection against forced selling at depressed prices
- Flexibility to let long-term investments recover on their own timeline
These clients are shielded from the stress of market swings. They do not have to make emotional decisions -- because their plan already accounts for volatility. That is the difference between having a retirement advisor and having a retirement plan.
Wealth Builders: This Is Your Moment
For clients still in the accumulation phase, we use the Compound Combine™ methodology to position for opportunity. A -10.5% drop followed by a 3,000-point rally? That is not chaos. That is the moment you have been preparing for.
We help clients:
- Rebalance intelligently when asset classes become mispriced
- Harvest tax losses and reinvest when the market is down
- Avoid emotional decision-making that locks in losses
- Build positions in quality assets when others are fearful
Today's bounce was dramatic. But more may come. If you are not positioned for it, you are already behind.
What You Should Do Now
If you are invested -- Stay the course. This is the reason you stayed disciplined. Your wealth management strategy was built for exactly this.
If you are not invested -- Ask yourself: what are you waiting for? Markets do not wait for comfort.
If you do not have a plan -- Now is the time to build one. One that protects in downturns and positions for growth in rebounds.
At Compound Advisory, that is what we do. From Annapolis to every state in the nation through virtual planning, we build intelligent, durable strategies that thrive through uncertainty -- not avoid it.
Final Word
You do not need to predict the next 90 days. You just need to stop trying to time it -- and start building a strategy that can weather anything.
The people who succeed in long-term investing are not the ones who guess the right headline. They are the ones who keep showing up, who believe in long-term growth, and who stay invested when it matters most.
If you would like to see how your current plan holds up under market stress, we invite you to schedule a complimentary Retirement Clarity Assessment. No pitch, no pressure -- just clarity on where you stand.
Compound Advisory is a registered investment advisor. All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.