Worried About the Stock Market? History Says Investors Should Keep These 3 Things in Mind.

The stock market may be the best place to build long-term wealth, but there's no guarantee it will be a smooth ride as investors have likely noticed in the past week of steep price swings.

The announcement of fresh tariff policies on April 2 sent the S&P 500 (SNPINDEX: ^GSPC) plunging. The downward trend continued into the following week until April 9, when President Trump issued a 90-day pause on nearly all of the newly announced tariffs, except those on Chinese goods. That reversal pushed the benchmark index up a jaw-dropping 9.5% in a single session.

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Despite that temporary sigh of relief, many investors are still worried. In times of uncertainty, history says to keep these three things in mind to stay on track with your portfolio.

Expect periods of turmoil

Everyone wants to see the value of their portfolio always go up and to the right, but this just isn't how the market works. If you view the stock market as a reflection of every investor's mood at any given point in time, it makes sense there will be periods of extreme optimism, as well as times when it feels like the world is ending.

In other words, corrections and bear markets aren't anything new. In fact, the S&P 500 has experienced a correction 56 times since 1950, and a bear market occurs about once every three-and-a-half years. Despite the down periods, which can be unnerving, the broad index has produced a historical average annualized return of 10%.

It's also worth mentioning that the best buying opportunities can often present themselves when the prevailing market sentiment is most bearish. As legendary investor Warren Buffett is known for saying, "Be greedy when others are fearful."

Uncertainty is a constant companion

The current economic environment is full of uncertainty. Investment banks are updating their models to reflect increased odds that the U.S. will enter a recession this year. Consumer confidence has plummeted, and it's now at the lowest level in over two years. Companies are lowering their growth forecasts.

To be clear, it's natural for an investor to worry when facing these developments. The situation might even discourage you from putting money in the market, or even worse, it might lead you to sell your stocks.

But if you look at the past, it also becomes clear how investors must always grapple with an uncertain environment. Just in the past five years, they've had to navigate the COVID-19 pandemic, supply chain bottlenecks, inflationary pressures, and rapidly rising interest rates. Yet, those issues didn't prevent the S&P 500 from posting a total return of 96% since April 2020.

So, while the market hates uncertainty, the truth is the future is always somewhat unpredictable. Good companies can adapt to changing industry conditions.

Time in the market matters most

When there's a lot of volatility in the stock market, the best course of action is to strategically sell high and buy low, right? After all, it makes sense that investors would want to avoid the sell-off and profit from the recovery.

This is easier said than done, though, and it is likely to end up causing more harm to your portfolio than simply holding fast. What matters most is spending time in the market, not perfectly timing your investments. This means being fully invested, assuming you have taken important measures like establishing an adequate emergency fund and paying off high-interest debt.

A powerful tool of consistency is called dollar-cost averaging. Adding to your portfolio at set intervals, say monthly or quarterly, helps to build a habit of regular investing regardless of what the market or economy seem to be doing. It also keeps your attention on the long term, not the latest headlines that are mostly just a distraction at the end of the day.

Investors worried about the market's latest turmoil should remember these three things to maintain the right mindset moving forward.

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Neil Patel and his clients have 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.