Investing can be an emotional rollercoaster, especially when the markets are swinging wildly. Whether it’s driven by geopolitical tensions, inflation concerns, interest rate changes, or unexpected global events, market volatility can make even seasoned investors feel uneasy. If you’ve got your funds invested and you’re wondering what to do in times like these, the short answer is: don’t panic. Instead, follow these key principles to stay grounded and on track.
Stay Calm – Volatility Is Normal
First and foremost, it’s important to remember that volatility is part and parcel of investing. Markets naturally experience cycles of growth and contraction, and short-term dips are entirely normal—even healthy. They can help reset overpriced sectors and make room for new opportunities.
Reacting emotionally in these moments is one of the most common mistakes investors make. Panic selling when markets are down only serves to lock in losses. On the flip side, rushing to buy into sudden gains can mean overpaying and taking on unnecessary risk. Investing success is rarely about how you feel—it’s about staying disciplined and rational.
Revisit Your Investment Goals
Before you make any changes to your portfolio, take a moment to ask yourself: “Have my goals changed?” If your time horizon, financial goals, or risk tolerance remain the same, there may be no need to alter your investment strategy.
Many investors forget that investing is a long game. It’s about time in the market, not timing the market. Trying to jump in and out of investments based on short-term market news often results in missed opportunities and lower returns over time.
If you’re investing for something 10, 15, or 20 years down the road—whether that’s retirement, your children’s education, or building wealth—then short-term volatility is simply noise along the way.
Diversification Is Your Friend
One of the best tools for managing risk during volatile times is diversification. A well-diversified portfolio includes a mix of asset types—such as equities, bonds, property, and cash—and also spreads investments across various sectors and geographies.
This mix helps cushion against losses in any one area. When one part of your portfolio is down, another might be holding steady or even gaining. Diversification doesn’t guarantee profits, but it does help smooth the ride and reduce overall risk over the long term.
Avoid Knee-Jerk Reactions
It’s tempting to take action during a downturn—but that action isn’t always helpful. Selling when markets are falling can crystallise your losses and make it harder to recover when things rebound. Historically, some of the biggest market rebounds happen shortly after steep declines. Missing just a handful of those good days can dramatically reduce your long-term returns.
A study by J.P. Morgan found that if an investor missed the 10 best days in the market over a 20-year period, their overall return was cut in half. The lesson? Staying invested—even through tough times—usually works out better than trying to time the perfect exit and re-entry.
Use the Dip Wisely (If Appropriate)
If you’re still in the accumulation phase—that is, building your wealth and not drawing down on it—then a market dip may actually be an opportunity. Think of it like a sale at your favourite shop: you’re getting more for your money.
Regular investing through strategies like euro-cost averaging can help you take advantage of these lower prices. By investing a fixed amount regularly, you naturally buy more units when prices are low and fewer when prices are high, which can reduce the overall cost per unit over time.
Review – But Don’t Overreact
It’s good practice to review your investments once or twice a year, or when your personal circumstances change. However, checking your portfolio daily or weekly—especially during volatile periods—can lead to unnecessary anxiety and emotional decisions.
Unless something in your life has changed—such as your income, retirement timeline, or financial goals—stick to the plan. If your investment strategy was built with your goals and risk tolerance in mind, it should be designed to weather short-term market swings.
Talk to Your Advisor
Uncertain times are exactly when the value of good advice becomes most apparent. If you’re feeling unsure, anxious, or just want a second opinion, speak to a financial advisor.
A professional can help you review your current position, ensure your investment mix still aligns with your objectives, and make any necessary adjustments. Sometimes, just having someone to provide context and reassurance is all you need to stay the course.
Keep a Long-Term Mindset
Finally, remember that investing is a journey, not a sprint. Over time, equity markets have consistently trended upward, despite short-term turbulence. Think back to past crises—2008, Brexit, COVID-19—all created panic at the time, but markets recovered, and investors who stayed in the game were rewarded.
Patience and perspective are powerful tools in uncertain times. Trust in your plan, lean on professional advice, and remember that staying the course often delivers the best results.
Market volatility can be unsettling, but it doesn’t have to derail your investment journey. By staying calm, reviewing your goals, staying diversified, and seeking advice when needed, you can ride out the storm and stay on track toward your financial future. The markets will rise and fall—but your long-term strategy is what ultimately defines your success.