The market is a forward-looking animal.
Despite difficulties today, market participants are always looking forward for the next opportunity. That's why despite the ridiculous debate about the "fiscal cliff," higher unemployment claims, a still stagnant real estate sector, and a host of other ills, the market is still trading higher. Clearly longer term trends matter. Do you think a company like McDonalds or Apple make their decisions all based on the short term? Of course not.
This is not to say that you should ignore current conditions; it is absolutely critical that you assess the current environment and factor that into your investment decision. But with the exception of short-term traders, most investors should be looking forward for future capital opportunities. Whether it is one year or five, knowing your time horizon and investing on what you believe future data will indicate is the best path for investment success.
I know this seems obvious. But if it is so obvious, why do so many investors ignore this investing truth?
It all comes down to emotion.