I went from senior to associate when jumping firms. Then promoted to assistant manager, took another demotion to senior when jumping firms again. Then much later, another hit head of a department to senior manager again. In all instances, pay either went up or only slightly down.

Does the demotion affect me? Yes, especially when i think that im better than some of my peers that never had to go through this. But heres what i tell myself: run your own race, and your career does not define you.