Keith Speights, The Motley Fool
4 min read
Volatility is the name of the game with the stock market right now. Uncertainty reigns amid concerns about the Middle East and resurgent inflation. The odds of a U.S. recession have increased sharply in betting markets.
All of this could easily become overwhelming, especially to new investors and those hoping to retire soon. Some are probably tempted to sell everything and only hold cash. Others check their portfolios frequently, fearful of what they might see. Neither approach is ideal.
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I have been an investor for over 30 years. I’ve written about investing for 14 years. After watching multiple market cycles, if I could tell investors one thing about the stock market right now, it would be this: The biggest mistake you can make is to focus on short-term uncertainty instead of the long-term opportunity.
Morgan Housel said it best, “Volatility is the price of admission… You have to pay the price to get the returns.” He’s exactly right.
The reality is that market chaos is more common than you might think. The stock market has always been volatile. Corrections occur around once every one to two years, on average. Not coincidentally, the Dow Jones Industrial Average (DJINDICES: ^DJI) and the Nasdaq Composite Index (NASDAQINDEX: ^IXIC) entered correction territory in 2025 and 2026.
Bear markets happen every three to five years, on average. The last one was in 2022.
I have seen the Dow plunge 22.6% in a single day. I lived through the dot-com bubble bursting. I watched the market meltdown in 2008. I vividly recall the panic selling during the early days of the COVID-19 pandemic. Every single one of those steep market downturns presented tremendous buying opportunities. However, many investors were so focused on the short-term that they missed out.
Is today’s volatility somehow different from that in the past? I don’t think so. We don’t have to look hard to find several reasons for long-term optimism amid the general doom and gloom.
For one thing, corporate earnings have proven to be more resilient than many expected. Despite the highest tariffs in decades and significant geopolitical uncertainty, most companies continue to generate more money. Of the 503 stocks in the S&P 500 (SNPINDEX: ^GSPC) (there are more than 500 because some companies have multiple share classes), 424 (over 84%) have grown their earnings per share year over year.
