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Forward returns after a -3% session
Single-day -3% sessions cluster around macro shocks, geopolitical events, and liquidity crises. They occur roughly 5-8 times per year on average. Despite the alarming headlines, forward returns have consistently skewed positive.
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Median 3-month forward return after a -3% day is approximately +6%, roughly double the unconditional 3-month return.
Since 1928, the S&P 500 has experienced a -3% day roughly once every 2 months. They are a feature of equity markets, not a sign of structural breakdown.
7 of the 10 best single days in S&P 500 history occurred within 2 weeks of one of the 10 worst days. Missing both is neutral; missing only the best is devastating.
A -3% session arrives roughly every two months, so the most valuable response is usually a documented non-response: let a written rule, not the evening news, decide whether anything trades. Save the real review for a calm day — the question worth asking is whether your allocation still matches your risk tolerance, not whether to sell after one bad session.