Investors: 2 Reasons to Be Optimistic About the Stock Market Right Now

This is a tough time to be an investor. The S&P 500 is down by roughly 20% from its peak in early January, putting it into bear market territory, and the tech-heavy Nasdaq is down more than 27% year to date.

In times like these, it’s easy to feel pessimistic and discouraged about investing. It can even be tempting to get out of stocks altogether. But the future still looks bright for the stock market, and there are two good reasons to be optimistic right now.

1. The U.S. stock market has a strong track record

The stock market has experienced its fair share of rough times. In the past two decades alone, it has seen everything from the bursting of the dot-com bubble  to the Great Recession to the crash in the early stages of the COVID-19 pandemic. However, despite everything, the S&P 500 is up by more than 162% since 2000.

^SPX data by YCharts

Nobody can predict with any certainty exactly how the U.S. market will perform in the coming weeks or months. But historically, it has recovered from every single downturn it has experienced, and eventually gone on to set new highs. No matter what happens in the near future, it’s extremely likely the market will rebound eventually.

How long it will take to recover is also uncertain. But by staying invested for the long term, it’s far more likely you’ll see positive average returns over time.

2. Now is a fantastic buying opportunity

When share prices are down sharply and pessimism abounds, it may feel like the worst possible time to invest more money into stocks. In reality, though, such markets present some of the best opportunities to buy.

Many stocks have plummeted over the past eight or nine months, declines that in many cases have left them priced at discounted valuations. If you’ve had your eye on a particular company, now could be your best chance to buy when it’s essentially on sale.

This is especially true if that stock normally trades at a particularly high valuation.  Amazon (AMZN -1.04%) shares, for example, are down nearly 30% over the past…

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