After gliding through years where stocks mostly just rose, a generation of investors last year suddenly confronted a hard financial truth: Stocks are risky and can plunge at any moment.
For older investors, the nearly 20 percent drop in the S&P 500 index from late September through Christmas Eve was a reminder of the fear that gripped markets during the 2008 financial crisis, though not as bad. But for many investors in their 20s and early 30s, it was the first test of their mettle since they opened 401(k) and brokerage accounts.
So how did they do? The answer is crucial because these younger savers are on the hook to pay for more of their retirements than their parents or grandparents.
FILE- In this Aug. 17, 2018, file photo Marcus Harris poses at his home in Spring, Texas. Harris is a 35-year-old internal-medicine physician in the Houston area. Last summer, when stocks were setting record after record, Harris felt confident that he would be able to handle a severe downturn, even though he had yet to experience one in his five years of investing. When the market started skidding on worries about a slowing economy and President Donald Trump’s trade war with China, though, Harris acknowledges he felt some trepidation. (AP PhotoDavid J. Phillip, FIle)
The fear was that many would panic at their first brush with a severe downturn, sell their stocks and lock in the losses. Investing is an area where many experts say a participation trophy is an unquestionably good thing. Given enough years, stocks have gone on to recover from every one of their past declines.
Early indications are that millennial investors generally avoided panic. And not only are they still participating, but many embraced the volatility and saw it as an opportunity to buy more stocks at lower prices, according to data from brokerages.
At Fidelity, for example, millennial investors put in twice as many buy as sell orders for stocks and stock funds during the last three months of 2018, when the S&P 500 plunged 14 percent for its worst quarterly performance in nearly seven years.
They were actually more aggressive about buying stocks than they were a year earlier, at the end of 2017, when the S&P 500 closed out one of its strongest and calmest years in decades.
Older generations of investors also embraced the tumult in recent months and picked up their buying activity for stocks, though they were not as aggressive as millennials. Baby Boomers had roughly 1.3 buy orders for every sell order during last year's fourth quarter, for example. The data cover Fidelity's 20.8 million retail brokerage accounts.
The decisions did not come stress-free. Consider Marcus Harris, a 35-year-old internal-medicine physician in the Houston area.
Last summer, when stocks were setting record after record , Harris felt confident that he would be able to handle a severe downturn, even though he had yet to experience one in his five years of investing.
When the market started skidding on worries about a slowing economy and President Donald Trump's trade war with China, though, Harris acknowledges he felt some trepidation.
He had set his phone to notify him when some of the stocks he owns hit certain prices, both on the high and the low end. At work, as the S&P 500 careened lower in December to its worst month in nearly a decade, he got used to hearing often from his phone.
"It was probably five times a day," he said. "Ding! This stock has hit your low. Ding! That stock hit your low."
"It was a little scary, looking at my retirement account saying, 'Man, that's a lot of salary gone,'" he recalled. Harris eventually turned off the notifications. But he also said that he knew he had many years to go before he needed to use the money.
He ended up putting more money into stocks late last year, hoping to buy low. "I got age on my side," Harris said. "This is a 30-year plan."
The reaction was similar for many clients of Charles Adi, financial adviser at Blueprint 360 in Houston.
Before the downturn, Adi had discussed many times with his clients market volatility and the importance of sticking with an investment plan. But he got more worried calls than he was expecting as markets tumbled.
"You think your clients are going to act one way because you have these conversations, and they reassure you they know the game plan, but you really don't know what's going to happen in the moment," he said. "More often than not, the conversation I had was: 'You told me there were going to be some fluctuations, but I didn't understand what you meant. Are we going to change the plan?'"
In the end, most held steady. Only four of his clients moved their investments out of stocks and into cash, and three of them were older.
For many of his younger clients, he suggested viewing the drops as an opportunity to double down on stocks they were familiar with and had already reaped gains from, such as Netflix, Amazon and marijuana stocks. Many agreed.
Millennial investors were close to flat in terms of being net buyers or sellers of stocks at TD Ameritrade. That's similar to how they behaved in 2015, when the S&P 500 lost more than 10 percent in one five-day stretch.
"Not freaked out at all," said JJ Kinahan, chief market strategist at TD Ameritrade. "My theory, given the limited sample size, is that because of their age, they're willing to take more risk and see it as a buying opportunity."
Of course, the customers at TD Ameritrade are a self-selected group of people: those who chose to invest. The majority of younger households don't own any stocks at all.
A shade more than 41 percent of all households led by someone under 35 own stocks in some way, according to the latest data from the Federal Reserve. For all other age groups, except those 75 or older, more than half of households own stocks. The figures include both people who actively trade stocks and others who have a target-date retirement mutual fund in a 401(k) that they never touch.
But the rate of stock ownership has been going up in recent years for younger households. The most recent tally, from 2016, showed the highest rate of ownership for young households since 2007, before the financial crisis hit its peak.
Recent weeks have brought some relief for investors, as the S&P 500 has climbed about 12 percent since hitting a bottom on Christmas Eve.
That includes Harris, the doctor whose phone was dinging so often in December. "A few days after Christmas," he said, "I turned the notifications back on."
ISLAMABAD (AP) — As fears of a wider regional conflict escalate following U.S. and Israeli strikes on Iran that began in late February, Pakistan has emerged as an unexpected mediator, offering to help bring Washington and Tehran to the negotiating table.
Islamabad isn't often called on to act as an intermediary in high-stakes diplomacy, but it's stepped into the role this time for a number of reasons, both because it has relatively good ties with both Washington and Tehran and because it has a lot at stake in seeing the war resolved.
Pakistani government officials have said that their public peace effort follows weeks of quiet diplomacy, though they have provided few details. They have also said that Islamabad stands ready to host talks between representatives from the U.S. and Iran.
Here's what to know about Pakistan's mediation effort:
Pakistan’s role in Iran-U.S. negotiations surfaced only days ago following media reports. Officials in Islamabad later acknowledged that a U.S. proposal had been conveyed to Iran.
It remains unclear who has served as Iran’s point of contact in the indirect talks. Iran has maintained it has not held such talks and dismissed the U.S. proposal, but Tehran has acknowledged responding with its own proposals.
According to Pakistani officials, U.S. messages are being passed to Iran and Iranian responses relayed to Washington, though they did not specify how the process is being handled or who is directly communicating with whom. Pakistan's Foreign Minister Ishaq Dar said this week that Turkey and Egypt are also working behind the scenes to bring the sides to the negotiating table.
Abdullah Khan, managing director of the Pakistan Institute for Conflict and Security Studies, said that Pakistani’s mediation efforts may be contributing to relative restraint in the conflict. He noted that U.S. President Donald Trump has delayed his threats of large-scale attacks on Iran’s energy infrastructure citing diplomatic progress, and Iranian responses toward U.S. interests in the Gulf have been measured in what may be an effort to preserve space for diplomacy.
Previous US-Iran negotiations have been facilitated mainly by countries in the Middle East, including Oman and Qatar, but as they come under Iranian fire during the war Pakistan has stepped into the role.
Analysts say Pakistan’s geographic proximity to Iran — it’s one of its neighbors — coupled with its longstanding ties with the U.S., gives it a unique position at a time when direct communication between the two sides remains constrained.
Islamabad has good working relations with most of the key parties in the war, including both the U.S. and Iran. It has close strategic ties with Gulf states including Saudi Arabia, with which it signed a defense cooperation agreement last year. However, Pakistan has no diplomatic relations with Israel because of the lingering issue of Palestinian statehood.
Relations between the United States and Pakistan have improved since last year, with increased diplomatic engagement and expanding economic ties. Pakistan also joined Trump's Board of Peace, which aims to ensure peace in Gaza, despite opposition from Islamists at home.
Over the weekend, U.S. President Donald Trump spoke to the Pakistani army chief Field Marshal Asim Munir, whom Trump has publicly described as his “favorite Field Marshal.” Analysts say he's a player who enjoys good ties with both the Iranian and U.S. militaries.
The conflict poses some of “the biggest economic and energy security challenges” in Pakistan’s history, said Islamabad-based security analyst Syed Mohammad Ali.
The country gets most of its oil and gas from the Middle East — and, he said, the five million Pakistanis working in the Arab world send home remittances each year roughly equal to the country’s total export earnings.
Rising tensions have already contributed to higher global oil prices, forcing Pakistan to increase fuel prices by about 20% and putting pressure on the government of Prime Minister Shehbaz Sharif.
The war is also adding to domestic turmoil, even as Pakistan has been grappling for months with its own conflict with neighboring Afghanistan. Islamabad has accused the country's Taliban government of tolerating militant groups that are behind attacks in Pakistan.
Earlier this month, protests erupted across the country following U.S. strikes on Iran, with demonstrators clashing with security forces in several cities.
A day after the United States and Israel attacked Iran, killing Supreme Leader Ayatollah Ali Khamenei, clashes erupted in Pakistan’s southern port city of Karachi and in parts of the north, leaving at least 22 people dead and more than 120 injured nationwide.
At least 12 people were killed in and around the U.S. Consulate in Karachi after a mob breached the compound and attempted to set it on fire.
Khamenei was a central religious and political figure for Shiites worldwide, including in Pakistan.
While Pakistan rarely serves as a mediator, its record does include playing a role in some very high-profile talks.
Pakistan’s then-President Gen. Yahya Khan facilitated backchannel contacts that led to U.S. President Richard Nixon’s historic 1972 visit to China. That paved the way for the establishment of diplomatic ties between Washington and Beijing in 1979.
Since then, Pakistan has played a role in several other complex regional conflicts, most notably during the 1988 Geneva Accords that paved the way for the Soviet withdrawal from Afghanistan. Acting as a frontline state and key interlocutor, Islamabad participated in U.N.-brokered negotiations while working closely with the United States and other stakeholders and helped increase pressure on Moscow to pull out its forces.
More recently, Pakistan facilitated contacts between the Afghan Taliban and Washington that led to talks in Doha that culminated in a 2020 agreement and set the stage for the withdrawal of U.S.-led NATO troops and the Taliban’s return to power in 2021.
Castillo reported from Beijing.
FILE - In this photo released by the Inter Services Public Relations, newly elevated Field Marshal General Asim Munir prays after laying wreath on the Martyrs monument during a special guard of honor ceremony at General Headquarters, in Rawalpindi, Pakistan, May 21, 2025. (Inter Services Public Relations via AP, File)
FILE - Paramilitary soldiers take positions at the U.S. Consulate after protesters stormed the building in Karachi, Pakistan, on March 1, 2026. (AP Photo/Ali Raza, File)
FILE - In this photo released by Pakistan Prime Minister Office, Pakistan's Prime Minister Shahbaz Sharif, left, and Iran's President Ebrahim Raisi meet during an inauguration of the Mand-Pishin border in Pishin, border of Pakistan-Iran, on May 18, 2023. (Pakistan Prime Minister Office via AP, File)
FILE - President Donald Trump, left, listens as Pakistan's Prime Minister Shehbaz Sharif speaks during a summit to support ending the more than two-year Israel-Hamas war in Gaza after a breakthrough ceasefire deal, on Oct. 13, 2025, in Sharm El Sheikh, Egypt. (AP Photo/Evan Vucci, File)
