- The American stock market, the S&P500, fell 8% in March, and then recovered to hit an all-time high on 15th April1.
- The Japanese stock market, the Nikkei 225, fell by 15% and has since also staged a full recovery2.
- Similar falls and subsequent recoveries were experienced in March 2020 at the start of the pandemic and March 2025 during ‘Liberation Day’, leading some investors to become increasingly accustomed to swift recoveries.
Billions wiped back on
The world still feels a particularly uncertain place. Iran and the US have not yet reached a permanent peace deal, Israel and Lebanon are still locked in conflict, and Brent crude oil prices are still stuck over $95 per barrel3. As a result, the average two-year fixed UK mortgage rate was 4.83% at the start of March vs 5.89% in April4, leading to real impacts on consumer wallets. With this backdrop the expectation might be for financial markets to be suffering and asset prices to remain in the doldrums.
The reality is quite the contrary. The American and Japanese stock markets just reached their highest ever levels on 15th April5. Whilst other stock markets in the UK and Europe are not quite hitting all-time highs, they have posted significant recoveries since the March low. Investors who held their nerve throughout the market falls have been rewarded.
Figure 1: Chart of Nikkei 225 and S&P 500 total return year-to-date.
Source: Alpha Terminal
Give them the V
These swift recoveries are known as “V-shaped” given their sharp fall and subsequent sharp recoveries. Naturally, we might not be at the end of this conflict and perhaps this is a brief period of optimism before future volatility. However, it certainly matches recent patterns we have witnessed throughout Covid-19 and “Liberation Day”, where markets recovered swiftly after an initial period of heightened volatility. The chart below highlights the relative speed of recoveries from recent stock market falls.
Figure 2: Source: Alpha Terminal
This compares to the 2008 stock market crash that saw US markets fall by 50% and take nearly five years to reach their pre-crisis levels6.
Figure 3: S&P500 returns from 31 Aug 2007 to 2 March 2012.
Source: AlphaTerminal
Are markets more resilient now?
Gordon Brown famously liked to assert, incorrectly, the end of boom and bust in the late 1990s. It has since been proven naïve to think that “things are different now” and that future crises will not be as severe. However, an argument could be made that market behaviour has changed how market crashes play out. Human psychology has not changed but the way information is disseminated and the way governments manage crises certainly has.
Governments and central banks now act within days to provide liquidity and fiscal support, reducing the duration of economic downturns. Technological advancements and algorithmic trading allow markets to digest news instantly, causing faster panic selling but also quicker, more efficient rebounds once fear subsides. Long-term capital from pension funds and institutional investors often provides a floor for markets during crashes, limiting long-term downsides. Sharp falls are often seen as temporary dislocations rather than permanent damage causing a “buy the dip” mentality to emerge amongst short term participants. This is not something we pursue at Bowmore as we take a much longer-term view with allocating our client’s money and prefer not to try to time the market.
Bowmore portfolios
We believe the key to successfully managing our client’s money is an intentional and informed approach to portfolio construction. We work hard to review and interrogate our underlying exposures, at an asset class level, sector level and geographic level. Our aim is to understand if we have any concentrations or over-exposures that are not deliberate. Our aim is not to diversify all risk away, rather we want to articulate our investment view through balanced and informed allocation.
As part of this process within Core portfolios we have recently reduced some of our equity-like risk by removing a hedge fund that tends to move more in-step with the stock market than we would like. We have replaced this with an infrastructure investment trust which invests in long-term, government-backed, inflation-protected projects, which will act a better protector of capital. Within ESG, we have sold the same hedge fund and replaced it with more of a sustainably-aligned infrastructure investment trust.
This exercise was several months in the making and required input from the entire investment team before we were in a position to make the decision. It reflects our thorough and detailed investment approach where all members of the team are encouraged to challenge and question the status quo.
Source: AlphaTerminal, data as at 16/04/2026
The value of your investments can go down as well as up, so you could get back less than you invested. Past performance is not a guide to future performance.
Sources:
1. Stock Market Today: Dow, S&P Live Updates for April 16 – Bloomberg
2. Alpha Terminal Data
3. Commodities – Live Quote Price Trading Data
4. Two major mortgage lenders CUT rates: Is this a turning point and will more follow? | This is Money
5. Alpha Terminal Data
6. Alpha Terminal Data