Should You Really Be Investing in the Stock Market Right Now? History Offers a Clear Answer.

The S&P 500 (SNPINDEX: ^GSPC) has surged by nearly 67% since it began its bull market in October 2022, as of this writing, bolstered by strong consumer spending and consistent corporate earnings growth.

But some investors are worried about a shift in the market. Inflation unexpectedly rose earlier this year, and bearish sentiment among investors is the highest it's been in the past 12 months, according to weekly surveys from the American Association of Individual Investors. In fact, only around 19% of U.S. investors are feeling optimistic about the market's six-month future.

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So what should you do with your investments right now? Is it time to get out of the market? Or is it safe to continue investing? Here's what history suggests.

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Timing the market is riskier than it may seem

To be clear, it's impossible to predict the market's future based on past performance. Nobody knows exactly where stock prices will be in a few months or a year, and despite growing concern about the market, we don't know whether we'll even face a downturn in 2025.

For that reason, trying to time the market is a risky move. It may make sense in theory to dump your stocks before a major market move. But because we don't know when that move will happen, you risk selling at the wrong time. Stocks may continue to surge right after you sell, and you'll have missed out on those earnings.

While it can seem counterintuitive, continuing to invest consistently is one of the safest things you can do right now.

History has good news for consistent investors

Historically, the market has managed to recover from every crash and recession it's ever faced. Even more importantly, those who benefited the most were the investors who continued buying throughout all the market's highs and lows.

For example, say that you were investing in an S&P 500 index fund in January 2008. The market was just starting its descent into the Great Recession, a bear market that would last over a year.

That may have seemed like the worst possible time to be an investor, and to be sure, the short term would have been rough. But if you'd simply held your investment for the next 10 years, you'd have earned returns of more than 82%.

^SPX data by YCharts

On the other hand, say that you avoided the market entirely throughout the Great Recession, waiting until January 2014 to begin buying again. At that point, the S&P 500 had just reached a new all-time high, and it may have seemed like a much safer time to invest.

^SPX data by YCharts

However, from 2014 to 2018, you'd only have earned returns of around 45%. While you would have experienced much less turbulence by waiting to invest, it also would have slashed your potential earnings.

Bad news is an investor's best friend

Market downturns are rough, and even seasoned investors are often unnerved by them. But one of the best ways to build long-term wealth is to continue investing no matter what happens in the market.

This is an approach even Warren Buffett swears by. In 2008, he wrote an opinion piece for The New York Times to encourage nervous investors amid the Great Recession. In it, he explained that market slumps can be one of the best times to buy, as you can snag higher-priced stocks at a discount.

"[I]n the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank," he wrote. "In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price."

If the market takes a turn for the worse, it can be tempting to pull your money out and avoid investing. But if you have the cash to spare, buying more during a market slump can get you more bang for your buck -- and set you up for serious earnings when stocks inevitably recover.

Market volatility is normal, but it can also be tough to stomach. By shifting your focus toward ways to take advantage of a downturn, it can be a little easier to avoid letting nerves take over.

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*Stock Advisor returns as of February 28, 2025

Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.