For many people, investments are not just figures on a page. They represent future income, family plans, financial security and the freedom to make choices later in life. So when markets are unsettled, it is understandable to feel concerned. This is exactly when it helps to step back, take a breath and look at the bigger picture before making any big decisions.
Volatility does not usually mean something has gone wrong. It is a normal, if uncomfortable, part of investing. A temporary fall in value is not the same as a permanent loss, unless you sell at that lower point and lock it in. Often, the biggest risk is not the market movement itself, but the decision made in response to it.
Why Retirement Can Make Market Falls Feel Different
Market falls can feel particularly personal when you are approaching retirement or already drawing an income. During your working life, there may be more time to recover and you may still be adding to pensions and investments. In retirement, the same fall can feel more unsettling because the money may already be helping to support your lifestyle, not just your future plans.
That is why a retirement plan should not depend on markets being kind every year. A good plan allows for difficult periods before they happen. Cash reserves, sensible withdrawal planning, diversification and regular reviews can all help provide breathing space, so you are not forced into rushed decisions when markets are unsettled. At Howard Wright Financial Planning, we believe this conversation should happen from day one, so the plan is built to cope with uncertainty before it becomes a problem.
Making Sure Short-term Needs Are Covered
A helpful way to think about this is to separate money that may be needed in the short term from money intended to support you over the longer term. An emergency fund can provide reassurance and flexibility, particularly when markets are unsettled. If markets fall, having cash available may allow income from investments to be paused for a period, rather than selling funds at an uncomfortable time.
This can give the invested part of the plan time to recover before withdrawals resume. It does not remove market ups and downs, and it does not mean the plan should never be reviewed. But it can create a practical buffer between short-term spending needs and longer-term invested money, helping decisions feel calmer when markets are difficult.
The Danger of Reacting at the Wrong Time
Even the best plan can feel tested when markets are falling. At times like that, many people naturally ask, “should I get out?” A better question is often, “was this sort of fall allowed for in the plan?” If it was, the most sensible response may be patience rather than action. If it was not, the plan may need reviewing, but calmly and carefully, not in panic.
The reason this matters is that some of the market’s strongest days often come very close to its most uncomfortable periods. J.P. Morgan Asset Management conducted an analysis that looked at a hypothetical $10,000 investment in the S&P 500 (an index of 500 large US companies) from 3 January 2005 to 31 December 2024. If left fully invested, it would have grown to $71,750, equivalent to a 10.4% annualised return. Missing just the 10 best market days reduced the value to $32,871, with a 6.1% annualised return. Missing the best 60 days reduced the value to $4,712. Past performance is not a reliable indicator of future returns, but the point is a useful one: some of the strongest recovery days can arrive when investors feel least confident. That is why trying to time the market can be so difficult, and why a calm, well-structured plan can be so valuable.
Staying Focused on the Plan
None of this means markets should be ignored, or that a portfolio should never change. Reviews are important, and your investments should continue to reflect your circumstances, objectives and attitude to risk. The key is that changes should be made because your plan has changed, not because short-term market movements have created fear.
Market volatility is the part of investing we tend to feel most sharply. But with a clear plan, enough flexibility, and regular advice, it does not have to control the decisions you make. Our role is to help you understand what is happening, keep decisions grounded in your long-term objectives, and make sure you do not feel you are facing unsettled markets on your own. The conversation worth having is simple: is your portfolio built so you can live through market turbulence without abandoning the plan?
If you are already a client of Howard Wright Financial Planning, your portfolio and attitude to risk will be reviewed as part of our regular planning discussions. However, if this article would be helpful to someone you know who is concerned about market volatility or approaching retirement, please feel free to share it with them. Sometimes a calm conversation at the right time can make all the difference.
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.