Stock price cycles—the recurring patterns of price bottoms, price upsides, price peaks, price downsides, and new price bottoms—are normal for many stocks over many years.

The upside phase of a price cycle is the time when buy-and-hold investors see price appreciation and capital gains. Dividend reinvestment and dollar-cost averaging enhances gains as wealth accumulation is highlighted during price upsides.

The price downside enables dividend reinvestment and dollar-cost averaging investors to acquire high-quality stocks at discounted valuations, lowering their cost basis and increasing dividend yield on cost. Downside phases increase the compounding efficiency of dollar-cost averaging and automatic dividend reinvestments (DRIPs). Reinvesting dividends and regularly buying shares with new money while stock prices are depressed purchases a larger number of shares, accelerating long-term wealth accumulation when the cycle eventually turns upward.

Here are useful calculators to see how price cycles affect long-term returns.