This Is 1 of the Worst Investing Mistakes You Could Make in 2025

The stock market can be intimidating, especially during periods of volatility. But the good times can be stressful, too, because nobody knows for certain when the next downturn will begin.

While the S&P 500 (^GSPC -0.43%) has surged by roughly 24% over the past year, more than one-third of investors feel pessimistic about the market’s six-month future, according to a December 2024 survey from the American Association of Individual Investors. So if you’re feeling nervous about what lies ahead for the market, you’re not alone.

That said, one of the worst investing moves you can make is letting emotions drive your decisions — especially as we head into 2025. Here’s why.

Check your emotions at the door

The past year has been prosperous for the stock market, but many investors are uncertain about what may lie ahead.

The average S&P 500 bull market since 1929 has lasted roughly three years, according to data from Bespoke Investment Group. Now that the current bull market has recently entered its third year, some investors may worry that a downturn is coming sooner rather than later. Coupled with a new presidential term and general uncertainty around what’s looming in 2025, it’s normal to feel nervous about the market.

However, making any rash decisions based on that anxiety could be costly. Nobody knows what the market will do in the next year or two, and it’s entirely possible it could continue surging. If you pull your money out now in preparation for a crash, you could miss out on serious gains if that downturn doesn’t arrive.

For example, say you stopped investing in March 2020 during the early stages of the COVID-19 pandemic. Many experts at the time warned that stocks could fall into a long-lasting slump, and it would have been understandable to avoid the stock market in an attempt to protect your money.

^SPX data by YCharts

Not only was that crash short-lived, but stocks unexpectedly went on to earn record-breaking returns over the following years. By the end of 2020 alone, the S&P 500 had soared by more than 27%.

Staying in the market back then would have been nerve-wracking, but setting your emotions aside and continuing to invest even as stocks were crashing would’ve paid off big time down the road.

The key to calming stock market nerves

It’s often easier said than done to avoid letting emotions drive your decisions, especially if you have a lot of money tied up in the stock market. But there’s one thing you can do to calm stock market jitters and make it easier to stay invested through the rough patches: Invest in quality long-term stocks.

The strongest stocks are from healthy companies with solid fundamentals — like a competitive advantage in the industry and a competent leadership team with experience guiding the company through difficult times.

These stocks can still experience significant volatility in the short term, especially if the market as a whole is shaky. But they’re far more likely to survive even severe downturns and go on to see positive returns after many years or decades. When all the stocks in your portfolio are from healthy companies, you can rest easier, knowing your investments will likely pull through anything the market throws at them.

A surefire investment option

If you’re not sure where to start or are looking for a safer option, you may opt for an S&P 500 ETF, such as the Vanguard S&P 500 ETF (VOO -0.40%) or SPDR S&P 500 ETF Trust (SPY -0.36%).

This type of investment includes stocks from 500 of the largest U.S. companies, many of which are industry titans that have been around for decades. While there are never any guarantees in the stock market, if there are any stocks that are likely to survive periods of market volatility, it’s those in the S&P 500.

No matter where you choose to invest, double-check that all the companies you own have solid fundamentals. Then, be prepared to stay in the market for the long haul, riding out any stock market storms. By taking these two steps now, you’ll be ready for whatever may be looming in 2025 and beyond.

Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.