The U.S. has endured ten official recessions since the S&P 500 (^GSPC -0.75%) was launched in its current form in 1957. Therefore, it's only a matter of time before the next recession occurs. High inflation, rising interest rates, military conflicts, and unresolved trade conflicts could all drive the U.S. into its next recession. But as someone who started buying stocks before the Great Recession started in 2007 -- then bought more stocks over the following two decades -- I'm not worried at all.

Image source: Getty Images.

The market always bounces back

The S&P 500 experienced some painful declines during the last two recessions. During the Great Recession from 2007 to 2009, it experienced a peak-to-trough decline of 57%. During the COVID crash in early 2020, it plummeted 34% in just two months.

But when the market experiences those pullbacks, we should remember Warren Buffett's advice to be "greedy when others are fearful." Buffett also said that if you buy a stock, you need to be prepared to "have it go down 50% -- or more -- and be comfortable with it."

Many investors don't have the patience or fortitude to follow that advice. Instead, they'll see their stocks when they should be buying more shares. Even though the S&P 500 experienced steep declines during each recession, it always bounced back -- and it's consistently generated an average annual total return of about 10% since 1957.

The market rewards patient investors

If you had invested $10,000 in Vanguard's S&P 500 Index Fund (VFIAX +0.00%) on the first day of 2007 and reinvested your dividends, your investment would be worth about $79,300 today. The S&P 500 consistently bounced back because it's rebalanced quarterly to include only the country's 500 most valuable companies. The Great Recession and COVID crash took down some of those top stocks, but healthier, faster-growing companies replaced them.

That's why it's so difficult for individual stocks or funds to consistently beat the S&P 500. That said, some individual stocks generated even bigger gains for investors who tuned out the near-term noise. If you had invested $10,000 in Apple (AAPL -0.80%) on the first day of 2007, your investment -- including reinvested dividends -- would be worth over $1.33 million today. A $10,000 investment in Nvidia (NVDA -1.47%) would have grown to $4.06 million.

So instead of worrying about when the next recession will occur, investors should embrace it as an opportunity to invest in an index-tracking ETF or accumulate more shares of their favorite stocks at lower valuations. As long as the U.S. economy keeps growing, its top stocks should continue to rise.