Why long-term investing may beat market volatility

Rising economic uncertainty in the United States is making many investors nervous, but financial experts say the smartest strategy may be to stay calm and think long term. Despite concerns about a possible recession and high market valuations, history suggests that remaining invested often helps protect and grow wealth over time.

Recent surveys show investor anxiety is increasing. About 80% of Americans say they are worried about a potential recession. Some market signals are also causing concern. For example, the Shiller CAPE ratio — a measure of long-term stock valuation — is near levels last seen during the early-2000s dot-com crash. However, analysts warn that such indicators cannot reliably predict exactly when markets will fall.

Bear markets are usually shorter

Market downturns are a normal part of investing. Research shows the average bear market since 1929 has lasted about 286 days, or a little over nine months.

In contrast, bull markets — periods of rising prices — have historically lasted much longer, averaging more than 1,000 days. This gap is one reason experts say long-term investors often come out ahead.

Financial planners caution that selling during a market drop can lock in losses. Investors who remain invested give their portfolios time to recover when markets rebound.

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Staying invested matters

History shows that markets tend to recover even after major shocks. The S&P 500 has risen sharply since the most recent downturn began in 2022, and it has delivered strong gains over the long term despite multiple crises.

Advisory firms note that diversified index investing can help reduce risk, while carefully selected individual stocks may sometimes outperform. Still, the key message from experts is consistent: avoid panic decisions.

In periods of volatility, patience, discipline and a long-term perspective remain some of the most reliable tools for building wealth.