If you're tired of the stock market's endless ups and downs, you're not alone.
Between the collapse of crypto exchange FTX last year, the recent bank failures, and the threat of an upcoming recession, investors have been through the wringer over the past several months -- and everyone is hoping that we'll soon see the light at the end of the tunnel.
Many investors are wondering when the next bull market will begin. While there's no easy answer to that, there is a better question (with a more promising answer).
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Where will the market be 20 years from now?
When you're investing in the stock market, it's easy to get caught up in the short-term fluctuations. Minor price swings can feel monumental, and nobody likes watching their portfolio plummet.
But rather than asking when prices will rebound or when the next bull market is coming, ask yourself where your investments will be a decade or two from now. No matter what happens over the coming weeks or months, the market's long-term potential is incredibly promising.
In fact, research shows that if you're a long-term investor, it's far easier to make money than it is to lose money in the stock market.
Crestmont Research analyzed the rolling 20-year total returns of the S&P 500 starting in 1900. Researchers found that in all years examined, from 1919 to 2022, the S&P 500 earned positive total returns. This means if you had invested in an S&P 500 index fund at any point after 1900 and held it for 20 years, you'd have made money.
The market has not just earned positive returns over time -- it's seen substantial positive returns. For example, since 2000, the S&P 500 is up by nearly 170% -- despite experiencing some of the worst downturns in history during that time.
Even if a recession is looming and stock prices fall further, the market's long-term outlook is promising. By sticking it out and holding your investments for the long haul, it doesn't matter as much what happens in the near future.
The key to surviving market volatility
A long-term mindset can make these ups and downs more tolerable, but it's equally important to make sure you're choosing the right investments.
The market itself will rebound eventually, no matter what happens in the coming weeks or months. But not all stocks will recover from a downturn.
The best stocks are the ones from strong companies with healthy business fundamentals. These companies have the best chances of surviving a recession or market slump, and when your portfolio is made up of these kinds of stocks, your investments are far more likely to rebound.
Keep in mind that even the best stocks may take a hit in the short term if the market is rocky, and that's normal. But when you stay focused on your investments' long-term potential, that turbulence can be easier to stomach.
The next bull market is coming
While nobody knows exactly how long this slump will last or when the next bull market will begin, we do know it's coming. No downturn can last forever, so it's only a matter of time until prices start rebounding.
The best thing you can do right now is to focus on finding strong investments, then hold them for the long term. Because stock prices are lower now, it's a smart time to load up on quality stocks at a fraction of the price. Then when the market inevitably rebounds, you could see substantial gains.
Market volatility is nerve-racking, especially when it's unclear how long it will last. But a bull market is coming, and by investing now, you can take full advantage of it.
