As I write this, the U.S. stock market is off by the largest amount since the COVID bottom. The fear index watched by many on Wall Street is currently “extremely high.” And it just seems the market’s current momentum is down. I’ve been doing this long enough to begin to feel client temperament, questions, and just an all-around feeling of “this time feels different” is now upon us.

Right now, investing feels somewhat akin to broken, with no indication how one can make money in such a scenario. It’s defeating. It’s unconformable, and, quite frankly, it’s understandable to feel helpless.

It’s easy to understand you want to stop the bleeding, rid yourself the anxiety of not knowing what the future holds; and simply sell your holdings. I’ve already heard a few people loud and clear asking, “Why don’t we just sell and sit this one out and wait for the all-clear to reengage?”

To that, I quote American billionaire investor Charles Munger, who says, “Hurry up and do nothing.”

That doesn’t mean we don’t potentially harvest losses or buy down into more punished asset classes, which are assets that investors have sold off more severely than others. It also might be time to add money at the depressed prices. But what Munger is so eloquently stating is the obvious: Markets are efficient over time and will inevitably rebound to the pre-2022 levels and continue to rise and meet their long-term averages. We just don’t know when that will occur.

Time and time again, the data shows nobody can predict when the “all clear” signal rings and liquidity piles back into the stock market. 

And to make matters even more difficult, the top 10 trading days over the last 20 years have been within a few weeks of the worst trading days. For example, for you to get the long-term averages in the market, you must take the good with the bad. By missing these top 10 trading days, you cut your 20-year average return almost in half compared to what the index has done.

As the late American investment banker Shelby C. Davis once said, “You make most of your money during bear markets. You just don’t realize it at the time.”

So, what is the disciplined long-term investor to do? I offer up three key things you can control:

•Build a plan that focuses on your values set. Give meaning to the numbers we are always analyzing, and you’ll feel a little more engaged and willing to attack your long-term plan with the mental fortitude needed to stay the course.

•Be optimistic. At the end of the day, if you slice all the historical data as many ways as you like, the only rational opinion on the markets over the long run is optimism. Markets are efficient and go up over time.

•Partner with someone who values your needs and wants to see you succeed. That might even be someone who can help you see the opportunities of tomorrow and will sit side-by-side as you patiently await the next inevitable bull market. It’s in these rough times that having accountability is so important so as not to convert volatility—the day-to-day swings in asset prices—into risk of permanent impairment of capital within your investment plan, or making “The Big Mistake” and selling out of your investment portfolio at the wrong time … like right now.

I will conclude by using one of Abraham Lincoln’s favorite sayings: “This too shall pass.” It just may not feel like it in the midst of a market correction.

In the meantime, I’ll look forward to enjoying that mean reversion to the upside when it inevitably occurs. I’ll just be waiting here patiently.

Dave Gordon is director of retirement planning at Ten Capital Wealth Advisors LLC, in Spokane. He can be reached at 509.325.2003, and [email protected].