“If you’re feeling seasick, look at the horizon,” says Justin Urquhart Stewart, director of Seven Investment Management. “It works in boats and it works in markets.”

For ordinary investors and anyone saving for retirement, it’s sage advice: peer five, ten, twenty or forty years into the future and the gyrations in financial markets this month probably won’t amount to a hill of beans.

Longevity in stock market investment irons out most wrinkles. The key to successful investment is to stick with good-quality companies through the good times and the bad, and the error is usually trying to time share purchases and sales cleverly.

All this plays to the strengths of direct private investors, who tend to shove share certificates in the back of the drawer and forget them, completely ignoring the day-to-day noise from the stock market.

It also works for the millions of employees now saving in defined- contribution pension plans. The steady monthly trickle of their contributions into stock market investments means that they do not have to try to time market entries and exits.

Employees lucky enough to be in defined-benefit schemes do not have to worry anyway. It is their employers who will have to dig deep if the shares downturn were to turn into something more pronounced and prolonged.

Share prices can gyrate all over the place in the intervening years. It’s where they end up as people approach retirement that matters. So long as companies can keep paying dividends in the meantime — and most British blue chips are sufficiently cash-rich to do just that — a bear market doesn’t matter. Indeed, for the young, the slide in share prices is a positive advantage. For twentysomethings and thirtysomethings with most of their asset-buying years ahead of them, cheap shares are obviously better than dear shares. For them, the slide is a cause for celebration.

For more sophisticated private investors, the events of the past few weeks pose more of a quandary. Most are sitting on decent profits. It is only the most recent of stock market novices who have been badly burnt. Share prices have fallen back only to the levels of a year ago.

Be fearful when others are greedy and greedy when others are fearful, said Warren Buffett, the world’s third-richest man and an investor with an unparalleled 40-year track record. “I buy stocks when the lemmings are headed the other way,” he said. On that basis, investors should now be piling in to the market. But there is another stock market aphorism: never try to catch a falling knife. The momentum of sell orders can overwhelm the most rational buy case. Markets overshoot. Hedge funds and other leveraged investors are having to offload shares and other assets regardless of price as lenders demand their money back.

We are in unknown territory. It’s widely agreed that as the greatest lending splurge in capitalist history comes to an abrupt end, there are bound to be casualties, indeed it is healthy that there should be. It is not just day-by-day news of hedge fund collapses and leveraged deal failures that worries financial markets. It is the complete silence from the big banks at the heart of the financial systems that is more unnerving. Until dealers believe the body count is sufficient to account for the hundreds of billions of dollars in unwise lending, jitters will continue. The big question for medium-term investors is whether, by then, the souring market sentiment will feed through into the wider economy, dampening consumer and business confidence.

City bonuses, jobs and tax receipts may suffer this year and next. But nest-eggs a decade or two from now will be unaffected. Just keep looking at the horizon and try to ignore the occasional faceful of seawater.

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