If you’ve felt frustrated, confused, or even exhausted by this market lately, you’re not alone.

Stocks sell off on good news. Strong earnings get punished. Valuations compress even as businesses improve. Entire sectors feel like they’re in free fall one week, only to bounce the next. Nothing feels clean. Nothing feels easy.

To many investors, this market feels broken.

But here’s the reality most people miss: markets often feel the most broken right before the best long-term opportunities are created.

This isn’t a bug in the system. It’s the system doing exactly what it’s designed to do.

Markets don’t price assets based purely on fundamentals. They price them based on expectations.

Right now, expectations are low.

Investors are fearful about growth slowing. They’re worried about rates staying higher for longer. They’re unsure about AI timelines, consumer strength, and macro stability. That fear gets reflected in prices, not because businesses suddenly stopped working, but because confidence disappeared.

Fear compresses multiples faster than fundamentals deteriorate.

That’s why you’re seeing strong companies trade at valuations that would’ve seemed impossible just a year or two ago. Forward P/E ratios have collapsed. Software, fintech, healthcare tech, and growth stocks have all been repriced as if growth itself is permanently broken.

Fear doesn’t ask whether a company will be bigger in five years. It asks whether things feel safe today.

And fear is rarely patient.

Valuation compression is uncomfortable, but it’s also powerful.

When multiples fall faster than earnings, future returns improve. You don’t need explosive growth for stocks to work from these levels. You just need survival, execution, and time.

That’s the key shift most investors fail to make.

Opportunity doesn’t come from certainty. It comes from pessimism being overdone.

A market that feels “easy” usually means optimism is already priced in. A market that feels broken means expectations have been reset, sometimes too far.

This is where long-term investors quietly do their best work. Not by calling bottoms or timing exact entries, but by accumulating high-quality businesses when sentiment is detached from reality.

Compression doesn’t last forever. Businesses adapt. Margins stabilize. Growth re-accelerates. When sentiment turns, multiples don’t creep higher. They snap back.

That’s how outsized returns are built.

Bad sentiment feels like danger, but it’s often a signal that expectations are washed out.

When everyone is bullish, upside is capped. When everyone is cautious or outright negative, the bar for positive surprise is low.

Think about it this way: stocks don’t need perfect conditions to go up. They need conditions to be less bad than expected.

That’s why rebounds often begin when headlines are still negative and confidence hasn’t returned. By the time things feel obvious, prices have already moved.

Markets don’t reward comfort. They reward conviction built during uncertainty.

Bad sentiment doesn’t mean you buy blindly. It means you slow down, do the work, and ask better questions. Is the business still growing? Is the balance sheet solid? Are margins improving? Is management executing?

If those answers are yes, sentiment becomes your ally, not your enemy.

This market is mentally draining because it offers very little emotional payoff in the short term.

You don’t get instant gratification. You don’t get clean trends. You don’t get rewarded for being early.

Instead, you get second-guessing. You get volatility. You get periods where patience feels like a mistake.

That’s by design.

If long-term investing felt easy, everyone would do it successfully. The difficulty is the filter. It shakes out weak conviction, short time horizons, and emotional decision-making.

The market isn’t broken. It’s testing who’s actually willing to think long term.

In euphoric markets, the risk is owning stocks.

In compressed, fearful markets, the risk quietly shifts to not owning them.

When valuations are elevated, you need growth to be perfect. When valuations are depressed, you need growth to simply exist.

That difference matters.

At these levels, many stocks don’t require heroic assumptions to deliver strong returns over time. They require patience, discipline, and the ability to ignore noise.

That’s not glamorous. It’s not exciting. But it’s effective.

Markets like this separate speculation from investing.

Speculation needs momentum and excitement. Investing needs durability and time.

If you believe markets eventually reward cash flow, execution, and growth, then periods like this are not something to fear. They’re something to prepare for.

You don’t need to be all-in. You don’t need to be perfect. You just need to be intentional.

This market feels broken because it’s uncomfortable.

And discomfort is where opportunity quietly lives.

Fear, compression, and bad sentiment are not signals to panic. They are signals to slow down, think clearly, and focus on fundamentals.

The market doesn’t hand out long-term returns easily. It makes you earn them emotionally first.

This is one of those moments.

For investors who want a more structured, rules-based approach during markets like this, I run a strategy on Surmount focused on high-quality businesses trading at reasonable valuations.

The strategy prioritizes fundamentals, cash flow, and risk management over short-term noise, helping take emotion out of decision-making when markets feel chaotic.

If you’re interested in following along or learning more about the framework behind it, you can check it out on Surmount.

This content is for informational and educational purposes only and should not be considered financial advice. I am not a licensed financial advisor. Investing involves risk, including the potential loss of principal. Always do your own research and consider your financial situation and risk tolerance before making any investment decisions.