This week, major stock indexes experienced a significant downturn following President Donald Trump’s announcement regarding new tariff plans. The implications of these tariffs have not only affected U.S. markets but have prompted numerous countries to respond with retaliatory tariffs against American goods. The Nasdaq Composite Index (NASDAQINDEX: ^IXIC) has swiftly fallen into a bear market, while the S&P 500 Index (SNPINDEX: ^GSPC) is perilously close to following suit as the hours tick by.

In a notable speech delivered on Friday, Jerome Powell, the Chair of the Federal Reserve, issued a stark warning about the impact of tariffs on the economy. He stated that “tariffs are highly likely to generate at least a temporary rise in inflation.” This inflationary pressure could dampen economic growth and push unemployment rates to “elevated” levels. The prospect of rising prices and stagnating growth has left many economists and investors on edge.

Adding to the sense of unease, several economic experts are now raising alarms about a potential recession on the horizon. Analysts at J.P. Morgan have recently revised their outlook, now estimating a 60% likelihood of the U.S. entering a recession by the end of 2025, a sharp increase from their previous 40% prediction prior to Trump's tariff announcement. Such predictions have contributed to a growing sense of anxiety among American consumers and investors alike.

Despite these troubling developments, there remains a glimmer of hope for investors navigating this chaotic market landscape. One key piece of advice for those involved in the stock market is this: Time can be your best ally in weathering market storms.

Historically, the stock market has consistently demonstrated a remarkable resilience, having survived every recession, crash, and bear market presented to it throughout its history. Many investors who remained committed to their investments during previous downturns ultimately reaped significant rewards. For example, during the early 2000s, the market grappled with the bursting of the dot-com bubble, leading to one of the longest bear markets in the history of the S&P 500. Just as recovery began, the market faced the Great Recession, which marked the worst financial crisis since the Great Depression.

Following several years of recovery, investors encountered the COVID-19 crash in 2020, during which the S&P 500 lost nearly one-third of its value in just three weeks, becoming one of the fastest market crashes ever recorded. Nevertheless, since January 2000, the S&P 500 has impressively surged by 245%, showcasing the long-term potential of the stock market.

Time, therefore, emerges as a crucial asset when considering how to survive moments of volatility. On average, bear markets for the S&P 500 last around 9.5 months, with the most prolonged bear markets, such as the one following the dot-com collapse, extending to approximately two years. While these durations may feel like an eternity during downturns, historical data suggests that periods of economic prosperity typically outlast challenging times. In fact, the average bull market for the S&P 500 extends around three years, with the recovery following the Great Recession famously lasting an astonishing 11 years.

So, what actions should investors consider taking in light of the current market downturn? With stock prices consistently declining, there may be an instinctual urge to withdraw investments or halt further contributions altogether. Though this reaction may seem logical at first glance, the unpredictable nature of the market could make such a strategy counterproductive, potentially leading to greater losses down the line.