Smart people agree that the best investing wisdom shares a common theme 🧐

Plus a charted review of the macro crosscurrents 🔀

An AI-generated image of clocks.

Stocks fell last week, with the S&P 500 falling 2.9% to close at 4,320.06. It was the worst week since March. The index is now up 12.5% year to date, up 20.8% from its October 12 closing low of 3,577.03, and down 9.9% from its January 3, 2022 record closing high of 4,796.56.

It’s been a rough couple of weeks in the stock market. After hitting its 2023 closing high of 4,588.96 on July 31, the S&P has been struggling to regain its footing.

But as TKer Stock Market Truth No. 2 reminds us, it’s typical for stocks to experience big drawdowns in any given year. Dealing with market volatility is what investing in risky assets like stocks is all about.

For more, read: Some unnerving stock market charts that may help you stay grounded 🧘🏻

This market slump has had me thinking about a discussion I recently participated in with Bespoke Investment Group’s Paul Hickey and CappThesis’ Frank Cappelleri on the Facts vs. Feelings podcast, hosted by Carson Group’s Ryan Detrick and Sonu Varghese.

Live from Excell 2023. (Source: Carson Group / YouTube)

As we were wrapping up, Ryan asked us for a timeless piece of investing advice. All of our answers hit on a similar theme. Here’s a lightly edited transcript from the podcast:

Frank: Know your timeframe. And don’t change. You can either be a trader, a short-term trader. Or if you’re long-term, I think you have to be market agnostic.

Paul: Your holding period. A one-day holding period, it’s a coin flip. The longer you’re willing to stick to it, the better. We call it the Montana rule. … Markets have never been down over a 16 year stretch or longer. Time heals in the markets.

Me: Time in the market beats timing the market.

Regardless of if you’re trading for the short term or investing for the long term, making money in the stock market is a process. And processes involve time.

So, whether you’re a chart guru like Frank or you’re a data god like Paul, the key variable when considering a trade or an investment is time.

‘Time heals in the markets’ 🕰️

In some cases, it might be appropriate to operate on tight timeframes. In many other cases, the move is to have a long timeframe.

The chart below backs up Paul’s observation. From Bespoke Investment Group: “Historically, the odds of the S&P 500 being up over any one-month timeframe have been 62.6%. Over a year, the odds of being up jump to 74.6%, and over eight years, they jump to 97%. Since 1928, all 16+ year time frames have seen positive returns.“

“Time heals in the markets.” (Source: @BespokeInvest)

And by the way, this only works if you stay put in the market. The more you weave in and out of the market, the more you risk missing out on those important stretches of gains that can make or break your long-term performance. As the saying goes, “Time in the market beats timing the market.”

In the stock market, time pays. It’s the valuable edge investors can take advantage of as they build long-term wealth in a market where the long game is undefeated.

Check out the whole episode of Facts vs. Feelings on Apple Podcasts, Amazon Music, Spotify, YouTube, or wherever you get podcasts!

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Related from TKer:

• Some unnerving stock market charts that may help you stay grounded 🧘🏻

• The summer stock market slump and what Wall Street pros are saying about it 📉

• In the stock market, time pays ⏳

• What getting older has taught me about P/E ratios 🎂

• 10 truths about the stock market 📈