Imagine tending a garden. Some days bring sunshine, others storms, and occasionally a plant looks worse before it grows stronger. A patient gardener doesn’t dig up their plants every time the weather turns. Instead, they trust the process: prepare the soil, plant a variety of seeds, prune occasionally, and let time do its work. Markets, like gardens, have seasons, and pulling everything out in winter is the quickest way to ruin a harvest.
1. Check Your Course (Revisit Your Plan):
Start by revisiting your investment plan and goals. Are you investing for 5 years? 10? 30? The longer your horizon, the more you can afford to wait out market storms.
2. Don’t Abandon Diversification: “Don’t put all your eggs in one basket…”
…the saying goes, and it’s especially true in volatile times. A well-diversified portfolio spreads your money across different types of investments. The idea is that when one area struggles, another might be doing better. For instance, rising interest rates might hurt high-growth tech stocks but make bonds more attractive (since new bonds are paying higher interest). Or a strong pound might dent the value of your overseas funds but have less effect on UK holdings. By holding investments across different regions and sectors, you avoid the fate of someone who went all-in on the “hot sector of the month” only to see it crash. Double-check that you’re diversified enough, many investors unintentionally have heavy concentrations (like lots of money in the USA, or too much in one sector through various funds). Good news if you utilise Howard Wrights active funds, these prioritise diversification when building the portfolio.
3. Remember: Volatility ≠ Loss:
A drop in the market only locks in a loss if you sell. Think about your house, if someone told you your house’s value dipped 10% this year, would you rush to sell it? Probably not, because you plan to live there for years and you expect it will hold or gain value long-term. Treat your stock investments similarly. The market will fluctuate; that’s its nature. Historically, after every downturn, the market has recovered and reached new highs, it just might take some time. So, if you can, sit tight and avoid making fear-based decisions. It can be emotionally hard, but often the best action in a downturn is no action at all. In fact, if you have spare cash and a sturdy plan, downturns can even be opportunities to invest at lower prices (the proverbial “buy low” approach). That’s not to suggest trying to time the bottom, but gradual investing (like through pound-cost averaging) when things are down can pay off when markets bounce back.
4. Use Volatility to Your Advantage (if appropriate):
If you’re still saving for retirement or other goals, volatility can actually work for you through pound-cost averaging. This means investing a fixed amount at regular intervals (say monthly into your ISA or pension). When prices dip, your fixed amount buys more units; when prices are high, it buys fewer. Over time, this strategy can lower the average cost you pay for investments. Many of our clients invest this way and find comfort in it: instead of dreading market dips, they see them as “shares on sale” that month. Of course, this is more of a mindset trick, but it reinforces that swings aren’t all bad when you’re a net buyer of assets.
5. Talk it Out:
Finally, sometimes the best antidote to anxiety is just talking to someone, such a financial adviser, about what’s worrying you. We’ve had clients call us saying, “Should I be doing something? Selling something?” and often after a chat about their long-term plan and how it already accounts for volatility, they feel relief in sticking with the plan. If market swings are keeping you up at night, that’s a sign your portfolio might be taking more risk than you’re comfortable with. In that case, it’s worth revisiting and adjusting to a point where you can sleep soundly. Peace of mind has value too.
Volatile Markets Can Feel Uncomfortable, but They’re Also a Natural Part of the Investing Landscape
Just as every garden faces periods of harsh weather, your portfolio will experience seasons of turbulence. While we can’t predict exactly when conditions will turn or how long they’ll last, we can prepare, by building a resilient, well-diversified portfolio and maintaining the right mindset. When you stay focused on your long-term goals and avoid reacting to every short-term change, you give your investments the chance to recover and grow. And remember, you don’t have to navigate those tougher seasons alone. If something is worrying you, we’re here to talk things through. Often, a small adjustment or a bit of reassurance is all that’s needed. Like a patient gardener, keep your attention on the bigger picture rather than every passing storm, and you’ll be well positioned to enjoy the harvest in time.
If you’ve found these ideas helpful or comforting during uncertain times, feel free to share them with anyone else who might benefit. Sometimes a small bit of clarity or reassurance can make a big difference, and you never know who might appreciate a steadier perspective when the markets feel stormy.
Disclaimer: This article contains information from sources believed to be reliable but no guarantee, warranty, or representation, express or implied, is given as to its accuracy or completeness. Howard Wright Ltd does not undertake any obligation to update or revise any future statements. Past performance is not a reliable indicator of future results. Investments can go down as well as up and actual results could differ materially from those anticipated. This article is for information purposes only and has no regard to the specific investment objectives, financial situation or particular needs of any person as such, the information contained in this article is not intended to constitute, and should not be construed as, investment or financial advice. Appropriate personalised advice should be taken before entering into any transactions. No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication. Howard Wright Ltd is Authorised and regulated by the Financial Conduct Authority.