The Market Will Double.
The Only Question Is When.
Some event will come out of left field, and the market will go down, or the market will go up. Volatility will occur. Markets will continue to have these ups and downs. … Basic corporate profits have grown about 8% a year historically. So, corporate profits double about every nine years. The stock market ought to double about every nine years… The next 500 points, the next 600 points — I don’t know which way they’ll go… They’ll double again in eight or nine years after that. Because profits go up 8% a year, and stocks will follow. That's all there is to it.
-Peter Lynch
Every investor faces the same problem: uncertainty.
A war breaks out. A recession looms. Some event comes out of left field, and the market tanks. Or it surges.
Nobody really knows.
Not you.
Not the experts on TV. Not even Peter Lynch—one of the greatest investors of all time.
But here’s what he did know: corporate profits have historically grown at about 8% per year.
And when profits rise, stock prices follow.
That’s the only constant in investing that actually matters.
Volatility Isn’t a Bug—It’s a Feature
Markets go up and down. Always have. Always will.
Most investors panic when stocks plunge. But Lynch saw volatility as an opportunity. When stocks drop for no good reason, that’s your cue to start shopping.
If a business is still compounding earnings at 8% a year, the price will catch up eventually.
Instead of fearing volatility, smart investors embrace it.
Think of it as the market’s way of shaking out the impatient. Stocks don’t move in a straight line, and corrections—sometimes deep ones—are part of the process.
But if you’re buying companies with real earnings growth, you’re playing a game where time is on your side.
Stocks Double Every Nine Years (If You Let Them)
Think about that.
If profits double roughly every nine years, stock prices should do the same.
Not because of some magic formula, but because earnings drive the market over the long haul.
Yet so many investors ignore this simple truth.
They obsess over daily price swings, headlines, and predictions that rarely come true.
They let fear or greed push them in and out of the market at the worst possible times.
Patience is what separates great investors from mediocre ones. The best returns don’t come from constant trading—they come from buying high-quality businesses and holding them long enough for compounding to do its work.
How to Play It Smart
Lynch’s wisdom boils down to three simple rules:
Expect volatility. It’s not a bug; it’s the nature of the game. Learn to use it to your advantage.
Trust the long-term trend. Corporate profits compound. Stock prices follow. Stay in the game.
Buy when others are scared. The best bargains show up when fear is at its highest.
If history is any guide, the market will double again.
Maybe in eight years. Maybe in ten.
The exact timing doesn’t matter—only that you’re still holding when it happens.
The only mistake? Selling too soon.
So, are you playing the short game, or are you willing to let time work in your favor?
What’s your biggest challenge when it comes to holding through volatility? Drop a comment and let’s talk about it.