The stock market has been on a nauseating roller-coaster ride of ups and downs over the last few weeks, and many investors are nervous about what the future may hold.
Only 22% of investors feel optimistic about where the market might be in the next six months, according to an April 2025 survey from the American Association of Individual Investors, and J.P. Morgan now predicts a 60% chance that the U.S. will enter a recession by the end of the year.
Even if a downturn is looming, however, this one simple investing move is one of the smartest things you can do right now: Keep buying consistently.
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The power of dollar-cost averaging
When the market is volatile, it can be tempting to pull back or even stop buying stocks altogether. While it may sound counterintuitive, it can actually be safer to continue investing consistently no matter what the market is doing.
This strategy is called dollar-cost averaging. Rather than trying to time the market and buy at just the right moment, dollar-cost averaging involves investing a set amount at regular intervals throughout the year. It’s a simple and straightforward approach, yet it has plenty of advantages:
- It can save you thousands of dollars: If you only invest when the market is thriving, you’re only buying stocks at the highest prices. By also buying during downturns, you can invest at steep discounts and potentially save thousands of dollars over time.
- It takes the guesswork out of when to buy: In theory, the best time to buy is when the market is at its lowest point. But it’s impossible to know when that will happen, and if you’re waiting for the perfect time to buy, you might miss it altogether. By investing a set amount each week or month, you’re far more likely to snag stocks at the lowest prices without having to time the market.
- It can reduce the impact of volatility: When you invest during both the peaks and valleys of the market cycle, those highs and lows can average each other out over time. That can help limit the impact of price swings, especially when the market is particularly volatile.
- It can help you earn more over time: Time is your most valuable resource, and the longer your money sits in the market, the more you can potentially earn. Investing consistently can make it easier to stick to a schedule and invest more over time, supercharging your long-term earnings.
If a market crash or recession is looming, dollar-cost averaging can help save you money while also protecting your finances. However, there’s still a big caveat to consider.
Where you invest is key to surviving a downturn
Investing consistently is only half of the equation, and it’s just as important to ensure you’re buying healthy stocks and holding them for at least a few years.
In the short term, even strong stocks could see a temporary decline. But companies that have strong business fundamentals have a much better chance of pulling through rough patches and going on to see long-term growth.
Investing in those companies now means snagging them for discounted stock prices, while also setting yourself up for significant gains once the market recovers. This is a tried-and-trusted tactic by some of the world’s greatest investors, including Warren Buffett.
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In 2008, Buffett penned an article for The New York Times to reassure discouraged investors amid the Great Recession, in which he wrote something that has become famous: “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”
He went on to add: “I haven’t the faintest idea as to whether stocks will be higher or lower a month or a year from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”
Timing the market successfully is next to impossible, even for the experts. And simply waiting for stocks to stabilize will rob you of valuable time and the opportunity to invest at a discount. One of the best things you can do, then, is to continue to invest consistently in healthy stocks — no matter what the market is doing.