I don’t know if everyone is seeing this, but my inbox has been flooded with posts about how we’re headed for a market crash! But as I dig deeper into these warnings…there isn’t much there to support it.

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🧠 You’re Not Going to Know When a Crash is Coming

Even the most celebrated investors and economists get it wrong. Markets are inherently unpredictable, and crash calls have a long history of being both loud and wrong.

Here are three examples of well-known experts whose crash predictions never materialized. I literally have a list of hundreds more just like this.

In 2012, Robert Shiller, Nobel laureate and creator of the CAPE ratio, warned that markets were overvalued and vulnerable to a sharp correction². The S&P 500 went on to more than double over the next seven years before its next major drawdown in 2020.

In 2016, George Soros told the World Economic Forum that he saw conditions reminiscent of the 2008 crisis and expected a “hard landing” in China to trigger global turmoil³. Instead, the S&P 500 finished the year up more than 9% and entered one of its strongest bull runs in history.

In 2021, Michael Burry, famous for “The Big Short,” repeatedly predicted an imminent market collapse, shorted major indices, and issued dire warnings on Twitter⁴. The crash he forecast never came, and the market went on to reach new highs in 2024.

These are brilliant, experienced minds with deep resources, yet their crash calls missed the mark. If they cannot consistently time crashes, neither can you. Turn off the news. It’s a losing strategy.

New Highs Don’t Indicate the End of a Bull Cycle

Over the past century, the S&P 500 has reached new all-time highs on roughly 7% of all trading days⁵. These highs typically cluster during periods of strong earnings, economic growth, and easing financial conditions, which is exactly the backdrop we are in today.

Contrary to the idea that new highs signal a market top, markets often continue to rise after hitting fresh records. Historically, one year after a new all-time high, the S&P 500 has been higher 80% of the time with an average gain of about 10 to 12%⁶. New highs are a feature of bull markets, not the end of them.

Crashes Are Rare While Corrections Are Common

Crashes, defined as sharp declines of 20% or more, are statistically rare. What happens much more often are corrections, which are pullbacks of around 10% that occur almost every year.

Since 1950, the S&P 500 has experienced an average of one 10% correction every 12 to 18 months⁷. These are part of the natural rhythm of the market and are usually triggered by short-term factors such as inflation data, Federal Reserve meetings, or geopolitical shocks. Historically, markets recover from corrections within about four months on average⁸.

The key distinction is that corrections do not automatically become crashes. Most are temporary pauses in an otherwise rising market.

Bull Markets Tend to Last Much Longer Than Bear Markets

Bull markets persist while bear markets are typically short. Over the last 90 years, bull markets have lasted an average of 1,011 days, nearly three years, while bear markets have averaged just 286 days, less than 10 months⁹.

Today’s bull market is still relatively young. Valuations are stretched in some areas such as large technology companies, but many sectors including industrials, financials, and small caps remain far from speculative extremes. Earnings trends are solid, and liquidity conditions have eased from their tightest points.

Breadth and Rotation Are Healthy

One classic warning sign of market fragility is when only a few stocks drive performance. That is not what we are seeing now. Market participation has broadened. Industrials, energy, and financials have joined the rally, and small caps are starting to outperform after a period of lagging.

This kind of rotation is consistent with the middle phase of a bull market, not the late stages that typically precede downturns.

Bottom Line: Look at the Patterns, Not the Panic

Crashes are scary, but rare. New highs, healthy sector rotation, resilient earnings, and the regular rhythm of corrections all point to a market behaving well within historical norms.

Volatility is part of investing. Vulnerability is not the same thing. The data does not support the idea that we are on the brink of a 2008-style collapse.

Avoiding the market out of fear can be far more dangerous than staying invested through normal cycles. Smart investors trust strategy over sensationalism.

Patterns, not panic, tell the real story.

Trying to avoid a crash often causes more damage than the crash itself. Investors who sit on the sidelines waiting for the “perfect” entry point rarely get it right. Missing just a handful of the best market days can drastically reduce long-term returns. Over the past 20 years, investors who missed the 10 best days in the S&P 500 saw their total returns cut by more than half¹. The biggest up days often occur right around the worst down days, which means that avoiding volatility usually means missing the recovery as well.

Market timing based on fear is emotionally tempting but historically costly. A disciplined, pattern-based perspective tells a much clearer story than sensational headlines.

📚 Sources

1. JPMorgan Asset Management, Guide to the Markets, 2024.
2. Bloomberg Interview with Robert Shiller, 2012.
3. World Economic Forum, Remarks by George Soros, January 2016.
4. SEC Filings and Michael Burry Twitter statements, 2021.
5. S&P Dow Jones Indices Historical Data (1928–2023).
6. CFRA, “S&P 500 Performance After All-Time Highs,” 2023.
7. Yardeni Research, “Stock Market Corrections,” 2023.
8. JPMorgan Asset Management, Guide to the Markets, 2024.
9. Fidelity Investments, “Bull vs. Bear Market Historical Averages.”

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