This Is the Single Best Investing Move You Can Make in 2025

The truth about the best market move for 2025 might surprise you. While the value of S&P 500 firms is historically high, inflation is still above the U.S. Federal Reserve’s target, bond yields are volatile, and media attention is on the potential effects of a returning U.S. president’s policies, you’d be forgiven for joining many on Wall Street who are nervous about the market in 2025. Still, experienced investors say the best thing to focus on this year is something else entirely—the power of patience.

Peter Oppenheimer, chief global equity strategist at Goldman Sachs and author of Any Happy Returns: Structural Changes and Super Cycles in Markets, put the lessons of past financial market cycles for most investors succinctly to Investopedia: “Staying the course” and relying on “compound returns over time is likely going to be more important” than short-term economic news.

The Market in 2025

The bearish outlook for stocks goes like this: Yes, fourth-quarter 2024 earnings were strong, inflation appears to be cooling, and artificial intelligence breakthroughs are still driving tech sector growth.

However, the S&P 500 Index is trading at a P/E ratio above 30, significantly above its historical median of 17.93—a level that preceded significant market declines all the way back to 1929. These valuations assume 20% annual earnings growth over the next five years, which seems overly optimistic even with AI’s potential. Add in stubborn inflation and political uncertainty, and many see a recipe for market turbulence ahead.

Why Buy and Hold Might Be the Best Strategy Right Now

So should you try to time the market for particular stock picks instead? Oppenheimer said that while certain sectors occasionally deliver exceptional short-term returns, that’s “not something you can consistently rely on.”

The logic is straightforward: stocks have historically moved upward over extended periods, reflecting long-term economic growth. Reviewing past cycles, Oppenheimer emphasized two key principles: taking a long-term view and diversifying your investments through a buy-and-hold strategy. “Having more diversified exposure helps to improve risk-adjusted returns over time,” he said.

While concentrating on hot sectors might work temporarily, “you can’t predict the future,” and history shows that spreading investments across different regions, asset classes, and styles reduces volatility and improves long-term performance.

This strategy also offers something valuable: peace of mind. Rather than stressing about market timing, investors can focus on what matters—letting their money grow over time through the power of compounding.

Simple Ways To Build Solid Long-Term Returns

So, how should you invest? For most, low-cost index funds offer the simplest path to diversification. These give you exposure to the returns of hundreds of stocks, automatically spreading risk while capturing the market’s historical 10.6% annual return since 1957.

Evidence shows most stock pickers—including professional fund managers—consistently underperform broad market indexes over time. Below is a chart showing the percentage of actively managed funds each year that failed to keep up with investing in major market indexes.

The optimal approach might combine both: build a foundation with index funds for broad market exposure, then selectively add individual stocks if you have the time and knowledge to research specific companies. This provides diversification while allowing you to invest in businesses you understand and believe in.

The Bottom Line

Investing can be stressful. Stocks and other assets move up and down. In an ideal world, you’d sell your stock just before the market falls, and buy just before it rises. But getting the timing right all the time is often just luck for many.

Nine times out of 10, the best strategy is to select a diversified group of long-term investments, then stick by them and ignore short-term price fluctuations. This strategy will save you a lot of stress and should pay off over the long term.