Market Volatility is a Prime Example
Imagine markets dropping sharply over the course of a week. Fear spikes, the urge to “do something” kicks in, and selling feels like a protective move. But unless your goals or long-term plan have changed, selling during temporary turbulence can lock in losses and sabotage your future growth. History repeatedly shows markets recover given time, often sooner than expected. Investors who panicked during events like the 2008 financial crisis or the rapid COVID-19 crash of 2020 frequently missed the rebound that followed.
Sitting tight during volatility feels counterintuitive because everything around you signals danger. Yet if your portfolio is properly aligned with your time horizon and risk tolerance, downturns are already accounted for within the strategy. In these moments, doing nothing is not passive, it’s a disciplined refusal to let short-term noise derail long-term progress.
Avoiding Trend-Chasing: Remember the dot-com bubble or Bitcoin mania?
Trends make people feel as though they’re being left behind, and fear of missing out can be a powerful motivator. During periods like the dot-com surge or the heights of cryptocurrency mania, many investors piled in late, buying at inflated prices only to regret it when the bubble burst. The temptation to “join the crowd” is understandable, but it rarely leads to sound, consistent results.
A more successful strategy is often to maintain your existing, well-constructed plan instead of chasing whatever’s currently fashionable. A diversified portfolio performs better over full market cycles than a collection of impulsive bets. So when someone you know boasts about big wins in a speculative investment, you can be curious, but you don’t need to follow. Staying aligned with your own goals and risk level is usually far more rewarding than hopping from fad to fad.
When Markets are Hitting New Highs Repeatedly – Same Logic
Rising markets can trigger their own form of anxiety. When everything seems to be climbing, people wonder whether they should take profits or exit before a downturn. While thoughtful rebalancing has its place, trying to guess when the peak will occur is just as difficult as trying to buy at the bottom.
Many investors who sold “just in case” ended up missing years of additional growth. Others who sold because of political fears or sensational headlines later struggled to find a good re-entry point. If your portfolio was designed with a long-term perspective, it already anticipates both highs and lows. The discipline to stay invested through both is a major driver of long-term returns. Sometimes holding steady in strong markets is just as important as holding steady in weak ones.
Changes in Regulations or Political Landscapes Can also Provoke Knee-jerk Reactions.
Financial news linked to tax rules or political changes often sparks rapid speculation. Rumours about pension adjustments, budget announcements, or new laws can cause people to act prematurely, and sometimes regret it. Acting before full details are known can create irreversible consequences.
Waiting for clarity before making decisions is often the more prudent approach. Not all proposals become policy, and not all expected changes play out the way early reports suggest. Staying patient allows you to act based on knowledge rather than assumption. And when a genuine need for change does arise, there is usually time to respond thoughtfully rather than reactively.
Emotion-driven Urges are Often Best Ignored.
When frustration, fear, or impatience takes over, it becomes incredibly tempting to make changes purely for emotional relief. Selling a lagging investment or switching funds after a difficult year can feel productive, but emotional decisions rarely lead to good long-term outcomes.
Underperforming investments often recover in the next cycle, and what is currently leading the pack may eventually cool off. A useful tactic is to introduce a personal cooling-off period: when you feel an urge to make a significant change, wait a set number of days or weeks. If the reasoning still seems solid after the emotions settle, then reassess. Very often, the desire to act fades, and you realise no change was necessary.
When Doing Nothing is an Active Decision
Doing nothing is not the same as negligence. There’s a big difference between strategic inaction and ignoring a genuine problem like rising debt. True “masterly inactivity” involves understanding your plan, recognising when short-term noise doesn’t warrant action, and choosing to stay the course.
Sometimes this even means deliberately waiting for a good opportunity rather than acting out of restlessness. Cash can sit idle until the right moment; a portfolio can stay untouched until there is a meaningful reason to adjust. In this sense, inaction becomes an active, intentional choice grounded in confidence and discipline.
“Don’t Just Do Something, Stand There!”
A cheeky reversal of a common phrase, but one I like in the context of investing. It captures that impulse control and strategic patience are virtues in finance. As your advisers, a big part of our role is sometimes to hold you back from harmful actions and reassure you that doing nothing is okay. It’s why having a plan helps, it gives confidence in inaction.
if you take one thing away from this message, let it be this: sit tight. Staying patient, sticking to the plan, and avoiding unnecessary reactions is often the smartest financial move you can make. If anything changes that genuinely requires action, we’ll guide you through it every step of the way.
If you know anyone else who might benefit from this perspective, or who tends to worry during times like these, feel free to forward this article on to them. A little reassurance goes a long way.
Thanks as always for your trust.
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.