Watch or listen to the episode below:
Turn on financial news any day of the week and you'll hear about the latest crisis threatening your portfolio. Geopolitical tensions, trade wars, inflation fears. There's always something to worry about.
But if you've been investing for more than a few years, you've probably noticed something. Most of these "crises" don't end up mattering much for your long-term returns.
In episode 2 of Long Story Short, Andy Pratt and Adam Newman discuss why this happens and what it means for how you should think about market volatility.
When tensions flared between Israel and Iran recently, markets sold off on the news. It's a pattern we see repeatedly: Something scary happens in the world, markets drop, push notifications flood your phone.
Historical data shows what happened to markets one year after major geopolitical events:
Even in cases where markets were negative a year later (like after 9/11 or the Ukraine invasion), other economic factors were already creating headwinds.
"The market tends to really not react to geopolitical events," Adam explains. "It brushes it off and looks forward, looks beyond it. Why? Because most of these things get resolved in one way, shape, or form, in a reasonable window of time."
One thing that's changed since the 2008 financial crisis is how investors respond to selloffs. Rather than panicking and selling, more people are buying the dip.
"I feel like more and more I'm seeing people who say, 'Hey, the market sold off, I'm buying,'" Andy notes. "And the people who do that have been huge winners."
This shift makes sense. Most corrections since 2008 have been short-lived. But it creates a new risk. What happens when we get a longer, brutal bear market where buying every dip doesn't work?
Andy's favorite perspective check: The S&P 500 was at 350 in 1990.
"At every level from 350 all the way up to where it is now at 6,000, there's someone saying it's gotta go back down, things are frothy," he points out.
But the market didn't go back to 350. And 20 years from now, you'll probably wish you could buy stocks at today's "high" prices.
The April tariff announcement created one of those moments that felt genuinely scary. Markets dropped nearly 20% in a matter of days. Then they recovered just as quickly when negotiations resumed.
"My read on this is that the tariff story is basically a non-issue for the stock market right now," Andy explains. "We've seen this playbook over and over again - there's gonna be a crisis that's created, it gets used for negotiation leverage, and then deals get announced along the way."
The lesson isn't that tariffs don't matter. Markets have learned to price in the negotiation process rather than just the initial shock.
None of this means you should ignore risk or assume markets only go up. Corrections happen about as frequently as your birthday, or roughly once a year. Bear markets occur roughly every five years.
For long-term investors, the main insight is simple. Most things that dominate financial headlines don't change the fundamental trajectory of markets over time.
"Companies are resilient, consumers are resilient," Adam notes. "We'll have recessions - it's a feature, not a bug - but long term we tend to get through these things."
As Andy puts it: "Pessimism always sounds smart and optimism always sounds like a sales pitch. But in investing, it's the optimists who win."
This doesn't mean being reckless or ignoring risks. Over long periods, the economy grows. Companies become more profitable. Markets reflect that progress despite scary headlines.
The next time breaking news sends markets tumbling, remember: Every past crisis looks like an opportunity in hindsight. The current one probably will too.