Why Long Term Investing Beats Selling in Volatile Times
Jun 18, 2025
During times like these when geopolitical headlines can be unsettling for investors, we at LPL Research like to remind ourselves of one of our key investing principles. Markets have always faced challenges —ranging from geopolitical conflicts and economic downturns to natural disasters, political upheaval and health crises. These events often trigger short-term volatility and shake investor confidence. However, historical data shows that stock markets have demonstrated a tendency to comeback after each crisis and rise over the longer time horizons. This patten underscores the importance, for strategic investors, of maintaining a long-term perspective – even when the near term outlook feels very uncertain.
Consider this: the likelihood of positive returns in the stock market increases significantly with time. While short-term performance can be unpredictable, the probability of gains may improve over longer holding periods. Over any one-year period, the market may be up or down, but over rolling 15 year periods since 1950, each such period has ended positive. While past performance is no guarantee of future results, the odds have historically favored long-term investors who are able to ride through the ups and downs and stay invested. A strategic time horizon is a key advantage long-term investors have over short-term traders and asset managers benchmarked every quarter.
Historically Longer Holding Periods Have Exhibited Increased Likelihood of Gains
Source: LPL Research, Bloomberg 05/30/25
Disclosures: Indexes are unmanaged and cannot be invested in directly.
Past performance is no guarantee of future results.
This long-term growth in markets has been driven by the fundamental strength of the economy, innovation, and companies’ ability to adapt and thrive over time, something that we at LPL Research believe has a good probability to continue. A simple investment of $10,000 in the S&P 500, left untouched for 30 years, has historically grown many times over, though past performance does not guarantee future results.
Looking Back, Strategic Investors Have Been Rewarded for Their Patience
Source: LPL Research, Bloomberg 05/30/25
Disclosures: Indexes are unmanaged and cannot be invested in directly.
Past performance is no guarantee of future results.
After examining the gains that a stock investor reaped over those 30-years, an uneducated observer could be forgiven for assuming that those years must have provided smooth sailing with few disruptive events. Far from it! If we add an overlay of geopolitical events on to the S&P 500 chart for the past 30 years, it’s clear that stocks rose despite multiple terrorist attacks, multiple wars and escalations in the Middle East, and the start of a ground war in Europe (Russia/Ukraine). Not only this, but this period also contains multiple financial crises, numerous contentious elections, “Brexit” and even the COVID-19 global pandemic. As with other time frames over the past century, despite countless disruptions and bouts of volatility that they have caused, the stock market has demonstrated remarkable resilience. Strategic long-term investors who stayed the course through these turbulent times may have been rewarded with compelling long-term returns.
Over Longer Time Horizons, S&P 500 Stocks Have Tended to Shrug Off Geopolitical Concerns
Source: LPL Research, Bloomberg 06/16/25
Disclosures: Indexes are unmanaged and cannot be invested in directly.
Past performance is no guarantee of future results .
Conclusion
Although the future is never guaranteed, historical trends suggest, in our view, that patience has often been a virtue for Investors who remain disciplined, diversified, and focused on their long-term goals may be better positioned to navigate market turbulence effectively. While it’s natural to feel uneasy during periods of uncertainty, history reminds us that have comebacks have often tended to follow crises and that stock markets have tended to show resilience over the longer-term time horizons. In investing, for those who have it, time is the greatest ally.
LPL’s Strategic and Tactical Asset Allocation Committee (STAAC) published its Strategic views here. Long-term investors and asset allocators can utilize these views in their portfolios with a strategic (long-term) time horizon, as LPL Research does in the Strategic model portfolios on LPL’s managed account platforms.
Important Disclosures
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing. Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk. Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. Asset Class Disclosures – International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Bonds are subject to market and interest rate risk if sold prior to maturity. Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply. Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features. Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses. Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk. High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors. Precious metal investing involves greater fluctuation and potential for losses. The fast price swings of commodities will result in significant volatility in an investor's holdings. This research material has been prepared by LPL Financial LLC. Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value
Tags: Current Events
More Insights
Jun 20, 2025
Birthdays may seem less important as you grow older. They may not offer the impact of watershed moments such as getting a driver’s license at 16 and voting at 18. But beginning at age 50, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits.
Jun 18, 2025
During times like these when geopolitical headlines can be unsettling for investors, we at LPL Research like to remind ourselves of one of our key investing principles. Markets have always faced challenges —ranging from geopolitical conflicts and economic downturns to natural disasters, political upheaval and health crises. These events often trigger short-term volatility and shake … Continue reading “Why Long Term Investing Beats Selling in Volatile Times”
Jun 16, 2025
Are you concerned about the inheritance taxes your heirs may have to pay? Then you may want to consider creating charitable lead trusts.
Jun 9, 2025
You’re beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims, health-care providers, credit card issuers, business creditors, and creditors of others. To insulate your property … Continue reading “Estate Planning – Protecting Your Assets”
Jun 6, 2025
You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you’ll need to fund your retirement. That’s not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your … Continue reading “Estimating Your Retirement Income Needs”
Top of Page
Services
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >
Find us on:
Copyright © 2025 Epic Capital Wealth Management. All Rights Reserved.
Securities offered through LPL Financial. Member FINRA/SIPC.
The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: CA, CO, DC, DE, FL, GA, IN, LA, MD, MO, MS, NC, NJ, NY, PA, SC, TN, TX, VA, VT, WA.