Markets are jittery - but this is nothing new.
You’ve probably seen the headlines lately - markets have had a bumpy few weeks. With renewed trade tariff talk out of the US, tension in Ukraine, and questions around big tech, volatility has spiked and global shares, especially in the US, have pulled back. It’s uncomfortable, yes - but market volatility is completely normal.
Here’s what we want you to remember
Volatility isn’t new. Markets move up and down. Over time, they trend upwards - but not in a straight line.
Diversification works. While the US is down, other markets like the UK and Germany are in positive territory. Having global exposure smooths the ride.
Reacting emotionally rarely pays. History shows that markets tend to bounce back - sometimes quickly. Those who panic and sell often miss the recovery.
Emotion is the enemy of a good strategy
Some of the major news stories — war, political unrest, or trade tariffs — can absolutely fuel fear and uncertainty. While it’s totally normal to feel uneasy in times like this, letting emotions dictate your investment decisions is almost always a mistake.
Two recent examples prove the point:
December 2018:
Between 4 and 24 December, the US share market (S&P 500) fell -15.7% in just three weeks - largely due to fears around slowing growth and US-China trade tensions. Sound familiar?
What happened next?
From Christmas Eve to the end of January 2019, the market rebounded +15.0%, erasing almost all the prior losses in just five weeks.
Covid Crash – February/March 2020:
From 20 Feb to 23 March, the S&P 500 dropped -33.9% - one of the fastest declines in market history, driven by the fear and uncertainty surrounding the global arrival of Covid-19.
What happened next?
From 24 March to 30 April 2020, the market bounced back +30.2%, once again wiping out most of the damage in just over a month.
In both cases (and in many others), the worst thing an investor could’ve done was sell out at the bottom. Why? Because the recovery often happens swiftly, and waiting for “certainty” usually means missing the rebound.
Don’t be distracted by short-term media noise
Trying to second-guess an unknowable future or time the market rarely works. Picking winners, avoiding losers, or selling out in fear can often do more harm than good. Staying invested through uncertain times has always been a proven path to long-term growth. If you zoom out, you’ll see that corrections like the current one are barely visible against the long-term backdrop of market returns.
Take a look at the below graph of the S&P 500 Index from January 1970 to now - that little red circle? That’s the recent dip. Perspective is everything.
The key is to focus on what you can control
How much you’re saving
How long you stay invested
Whether your plan still aligns with your goals
At Compound Wealth, we’re here to help you stay on track — especially when markets get noisy. If you’ve got questions, or just want to check in, we’re only ever a message away.
