Earlier this week, investors were despondent. Markets were reeling, sentiment was bleak, and the headlines screamed of uncertainty. Then, this week, in response to a 90-day pause on tariffs from President Trump, the stock market surged. Just like that, fear gave way to optimism, and the needle of public sentiment swung wildly from despair to euphoria. But wise investors know to remember the truest words in every market: this too shall pass.
The specific origins of the phrase are vague, often attributed to King Solomon, other times to Sufi poets, and occasionally as being etched onto rings by Eastern monarchs. Whatever its true birthplace, it is one of the most enduring expressions of impermanence in human history. Its brilliance lies in its duality: it offers hope in suffering, but also humility in triumph. It reminds us that no moment, no matter how extreme, is forever. This one simple phrase works a sort of magic in that it is both humbling in times of heady optimism and heartening in the market's darkest days.
In investing, this lesson is not just poetic—it’s practical.
Earlier this week, those checking their portfolios may have felt panic creeping in. It’s easy to believe that pain is permanent when you're in the thick of it. But just as the market can plummet, so too can it soar, often unpredictably. This week's tariff news and the resulting market surge is a perfect case in point: one announcement shifted the mood of the entire financial world. And yet, just like the downturn that preceded it, this new upswing, too, shall pass.
The problem isn’t volatility, which is inevitable; it’s our reaction to it. When we tie our emotional state to the market’s peaks and valleys, we end up making bad decisions at both extremes. We get greedy when prices rise and fearful when they fall. We chase the highs and flee from the lows, forgetting that both are temporary states. In truth, enduring wealth is built not in moments of market mania or despair, but through the quiet, consistent application of sound investment principles.
Lincoln captured this idea perfectly when he reflected on “this too shall pass” as both “chastening in the hour of pride” and “consoling in the depths of affliction.” Investing demands both humility and perspective. When things are going well, we must remember that success isn’t a signal to get cocky, it’s a reminder to stay grounded. And when things are rough, remember: the pain you feel today isn’t a permanent condition. Both are simply part of the cycle.
So how do we stay centered amid the chaos?
We embrace timeless principles. Diversification. Discipline. Long-term thinking. A belief in human progress and the realization that investing is the ultimate act of optimism. We resist the urge to respond to every swing. We take a deep breath and remind ourselves that while today’s headlines may feel like everything, they’re just a passing breeze in the life of an investor.
The markets will always move and our emotions are likely to follow, but wisdom remains: This too shall pass.
