Given last month's surprise shellacking, it would be easy for investors to justify calling it quits for a while. The S&P 500 fell 4% in September, but that figure obscures the fact that the index fell more than 10% from peak to trough. The month just happened to start and end on a bullish foot. We may not be out of the woods yet.

A little perspective is needed, though. As harrowing as the plunge was, look at where we were as of the end of August, and what the future appears to be. Recent volatility isn't a reason to be shaken out of the market. In fact, the pullback is serving up some nice entry opportunities.

Finger pressing a "buy" button on a computer keyboard

Image source: Getty Images.

A year that's been anything but ordinary

The S&P 500 may have tumbled to the tune of 10% from last month's high to last month's low, but don't overlook what took shape before that peak. The index had rallied more than 60% from its March low, and was ripe for a bit of profit-taking.

Granted, much of that big rally was an unwinding of the steep pullback from February's high, once the coronavirus took hold in the U.S. Investors understandably flinched, and once they realized the world could work around the virus, they bought back in. Even so, the sheer scope and speed of the rebound left stocks vulnerable to a stumble.

It would also be short-sighted to ignore how the market's biggest names exaggerated the overall bullishness from March through August, just as they exaggerated the recent pullback.

Take Apple (NASDAQ:AAPL), for instance. The world's biggest company -- as measured by market cap -- alone accounts for more than 6% of the S&P 500's total value, and it gained 140% between mid-March and early September. While its 20% sell-off from September's high was painful, it didn't erase the bulk of that run-up. Shares are still more than 40% above their best levels back in February.

Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), and Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) are the S&P 500's next-biggest constituents, and while not as influential as Apple individually, together they make up more than 20% of the S&P 500's value. Facebook's value doubled between March's low and September's high, but gave up nearly 20% last month. Alphabet shares essentially matched the broad market's mid-year gains, but logged a pretty big loss in September as well. Amazon almost doubled its size from March's low to last month's high, and then fell 16% between early and late September. The same basic story applies to Microsoft.

These powerhouse technology names rallied hard for more than five months, but investors arguably should have eased off three months into that advance. They didn't, making September's weakness far more dramatic than it might have been otherwise.

It's still all about the future

While September's setback makes sense when put in the right context, you still have to consider what the future looks like. Stocks are ultimately valued based on where they're going rather than where they've been. Largely lost in all the recent volatility is the fact that analysts still believe the nation's and the world's economies are growing.

Standard & Poor's not only keeps the S&P 500's makeup updated, but offers forecast data as well. With the second-quarter earnings season now squared away, the company's research arm is predicting a "per share" profit of $164.28 in 2021, up from this year's expected $113.84. That translates into a P/E ratio of 29.7 for this year, which is on the higher end of what would be considered normal. But next year's earnings projection leads to a forward-looking P/E of 20.6, which is somewhat more consistent with long-term levels. More important, the outlook models a continuation of the growth that was in place before COVID-19 took hold. Standard & Poor's profit outlook for the coming year would make a record that exceeds the S&P 500's big bottom line from 2019.

Then of course there's the old cliche that investors shouldn't try to time the market, but rather simply spend time in the market. It's a cliche for a good reason. The fact is, most investors who end up trying to outguess the market's next move end up doing their portfolios more harm than good. As legendary stock picker Peter Lynch once put it, "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves."

In other words, don't get distracted by the recent volatility, bearish as it may have been. It's just noise, even if more of the same is on the way this month.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.