For the 32-year period between 1993 and 2024, the market experienced a peak-to-trough decline of 10 per cent or more in all but six of those years.\u00a0<\/p>\n
Put another way, about eight out of every 10 years saw a market correction.\u00a0<\/p>\n
Downturns of over 20 per cent are less frequent but still fairly common, happening in roughly one out of every three years.\u00a0<\/p>\n
The enclosed graph provides a summary.\u00a0\u00a0<\/p>\n
![\"\"](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/08\/AD_4nXejb0nz9hAw3IEFuj6Vy4qOA5Cz_penh4DtmIksxI18Im6v0zcLTAd2bD3Dkb5akeWPoUukMs3nNUvobkx1rEKy-gyR6DDG.png\" "\\"Chart\\"\/")
<\/p>\n
Source: S&P Global Market Intelligence; Yahoo Finance; The Wall Street Journal; author\u2019s calculation\u00a0<\/p>\n
The odds are similar when we look at the US market.\u00a0<\/p>\n
According to wealth manager Ben Carlson, the S&P 500 also experiences a 10 per cent correction about once every year-and-a-half or so.\u00a0<\/p>\n
A bear market, defined as a fall of 20 per cent or more, historically hits the S&P 500 once every four years.<\/p>\n
So, now you know the odds.\u00a0<\/p>\n
But here\u2019s the point most people miss: knowing the odds of a storm does not tell you when it will start to rain.<\/p>\n
The Flaw in Averages<\/strong><\/p>\n It\u2019s tempting to take these historical odds and create a mental calendar for market crashes.\u00a0<\/p>\n Simply put, if a bear market happens at the STI once every three years, and we haven\u2019t had one in a while, one must be just around the corner, right?\u00a0<\/p>\n Unfortunately, the market doesn\u2019t operate on a tidy schedule.<\/p>\n There\u2019s a difference between theory and practice.\u00a0<\/p>\n The odds are based on averages, and averages can be misleading.\u00a0<\/p>\n Think about it: averages are like having one hand in boiling water and the other in ice.\u00a0<\/p>\n The average temperature is supposed to be warm, but you\u2019re still getting burned.<\/p>\n Furthermore, history shows that while the odds of a market decline holds true over long periods, the market can go for years without a significant decline.\u00a0<\/p>\n For instance, between 2003 and 2007, and again from 2016 to 2019, the STI did not experience a single 20 per cent decline.<\/p>\n The same goes for the period between 2021 and 2024.\u00a0<\/p>\n Investors sitting on the sidelines waiting for a \u201cpredictable\u201d crash would have been left behind.<\/p>\n This is the flaw in timing the market: you are trading one kind of risk for another.\u00a0<\/p>\n By trying to avoid a decline, you\u2019re taking on the risk of missing out when the market goes on a bull run.\u00a0<\/p>\n Legendary investor Peter Lynch said it best: \u201cFar more money has been lost by investors preparing for corrections than has been lost in corrections themselves.\u201d<\/p>\n The Paradox of Bull and Bear Markets<\/strong><\/p>\n As of last Friday (8 Aug 2025), both the STI and S&P 500 sit less than one per cent away from their all-time highs.\u00a0<\/p>\n By most measures, we\u2019re deep into bull market territory.<\/p>\n The numbers tell the story: the S&P 500 has surged by nearly 80 per cent since its 2022 low.<\/p>\n Some stocks have done even better.<\/p>\n Nvidia<\/strong> (NASDAQ: NVDA) shares are up almost 16x over the same period.\u00a0<\/p>\n If you\u2019re a Nvidia shareholder, you\u2019re probably kicking yourself for not buying more three years ago.\u00a0<\/p>\n Looking back, those 2022 lows now seem like screaming buy opportunities.<\/p>\n But here\u2019s the twist: success has bred a new kind of fear.<\/p>\n If you own shares today, you dread losing what you\u2019ve gained.\u00a0<\/p>\n If you don\u2019t own shares, buying at these highs feels like financial suicide.<\/p>\n Either way, the next market crash now looks like pure risk\u2014nobody wants to watch their portfolio turn from green to red.<\/p>\n In effect, crashes have become the enemy in investors\u2019 minds.<\/p>\n But wait a minute.<\/p>\n Didn\u2019t we just say that 2022\u2019s low was a golden buying opportunity?\u00a0<\/p>\n So, how can future market declines also be the biggest risk today?<\/p>\n Said another way, how can crashes be both opportunity and risk?<\/p>\n Morgan Housel, best-selling author and partner at Collaborative Fund, said it best: \u201cEvery past market decline looks like an opportunity, every future decline looks like a risk.\u201d<\/p>\n That\u2019s the paradox investors face today.<\/p>\n You can\u2019t have it both ways. If you want bargain prices, you have to embrace the declines.<\/p>\n Get Smart: Prepare, Don\u2019t Predict<\/strong><\/p>\n So what should you do when you know that market crashes are inevitable?<\/p>\n For starters, accept the odds.\u00a0<\/p>\n But use them to prepare, not predict.<\/p>\n Peter Lynch said it best<\/a>: it\u2019s not our brains, but our stomachs, that determine success in the stock market.\u00a0<\/p>\n Knowing that 10 per cent drops happen almost annually should spur us to prepare for when they arrive.<\/p>\n Instead of trying to guess when the next downturn will happen, spend your time building a plan for what you will do when it does.<\/p>\n Remember: market crashes are a feature, not a bug.\u00a0<\/p>\n Embrace the odds, have a plan, and let time work its magic.\u00a0<\/p>\n Dive into the future of technology with our newest FREE report, \u201cThe Rise of Titans.\u201d Discover how the big 7 US tech stocks can be your ticket to huge long-term gains. Download your copy today<\/a> and see how easy it is to supercharge your portfolio.<\/p>\n Follow us on Facebook<\/a>, Instagram<\/a> and Telegram<\/a> for the latest investing news and analyses!<\/p>\n An earlier version of this article appeared in The Business Times.<\/p>\n Disclosure: Chin Hui Leong does not own any of the shares mentioned.<\/p>\n \t\n