Lately, it feels like every market headline sparks a new wave of uncertainty. For investors, that can be exhausting—and make even the most seasoned feel a bit shaken.
News of tariffs and trade tensions continues to ripple through the markets, with economists and analysts adjusting forecasts and offering cautious outlooks. These developments have added to a sense of unpredictability, especially when market reactions come swiftly and sharply. As an investor, these movements have likely taken you and your portfolio on a bumpy ride, and you may be wondering what life would feel like if you got off the roller coaster instead.
But as history has proven time and time again, short-term volatility is a normal part of the market cycle, and it may not be in an investor’s best interest to jump ship during downturns. If you’re feeling weary about the current state of the markets, here are some important considerations to remember.
How Investor Behavior Impacts Portfolio Performance
It’s natural for investors to react to headlines and economic shifts, especially when the news feels constant and overwhelming. These collective reactions, often driven by emotion, are part of what’s known as investor sentiment. And when sentiment shifts across a broad group of individuals and institutions, it can significantly influence short-term market performance.
Volatility isn’t unusual. Markets regularly respond to events like tariff announcements, inflation concerns, interest rate changes, corporate news, and policy decisions. While these responses can create noticeable swings in the short term, they don’t typically define the long-term trend.
Investor sentiment creates short-term market movements, but it’s important to remember that, historically speaking, the market has always eventually trended upward. In fact, the farther you pull back your perspective on market performance, the smoother the journey upwards appears.
Your Mission? Sit Back, Observe, and Have Patience
As Warren Buffett so famously put it, “the stock market is a device to transfer money from the ‘impatient’ to the ‘patient’.” In times of market turbulence, it’s a quote worth remembering.
It’s easy to get caught up in the day-to-day movement of your portfolio. But those fluctuations, while sometimes uncomfortable, are a normal part of long-term investing. Your portfolio wasn’t built for today or tomorrow; it was designed with your future goals in mind.
When you work with a financial advisor to create an investment strategy, it’s tailored to your risk tolerance, timeline, and long-term objectives—like retirement or legacy planning. Markets move in cycles, and while downturns are part of that rhythm, they’re often followed by periods of growth. Because no one can reliably predict the exact timing of these shifts, staying disciplined and methodical in your approach is key.
The Cost of Moving Your Money
Market drops can be unsettling, especially when they’re tied to headlines like new tariffs or geopolitical uncertainty. In moments like these, it might feel tempting to pull money out of your portfolio in an effort to protect what’s left. But doing so can come at a cost.
Selling during a downturn means locking in losses that may have otherwise been temporary. Until you actually sell an investment, any loss is just on paper. Staying invested gives your portfolio the opportunity to recover as the market rebounds.
An even more compelling reason to stay invested? Historically speaking, the worst stock market days are often followed by the best. A JP Morgan study of the S&P 500 from 2005 to 2024 found that seven of the 10 best days occurred within just two weeks of the 10 worst days. Missing those key recovery days can have a significant impact. [1]
Here’s how that translates to your portfolio: If you invested $10,000 in 2005 and stayed fully invested through all market movements, your portfolio would be worth $71,750 in December of 2024. Missing just 10 of the best market days would drop your portfolio’s final value to $32,871. [1]
Staying invested—even when the market feels unpredictable—can be one of the most effective ways to stay on track toward your long-term goals.
Hedging Against Market Volatility
Staying calm during a market dip is easier said than done. But when you’re working with a financial advisor, you’re not navigating it alone. If you ever feel the urge to make a sudden shift based on market headlines or short-term performance, it’s worth pausing and reaching out to your advisor. They can help you assess the situation, revisit your strategy, and put current conditions into historical context.
At Envision Wealth Planners, we help clients build resilient portfolios designed to weather various market cycles. In addition to traditional investments, we may incorporate alternative or private investments when appropriate, providing broader diversification and exposure to assets that may not move in lockstep with public markets.
We also remind clients that market downturns, while uncomfortable, can create opportunity. For those in a position to invest more, these periods may offer a chance to purchase quality investments while they are “on sale,” supporting long-term growth potential.
Worried About Market Movements? Let’s Talk
Investing is a long-term journey, and some ups and downs are simply part of the ride. If you’re feeling uncertain about how recent policy changes or market shifts could affect your portfolio, we’re here to help.
Reach out to our team to review your strategy, answer your questions, and explore whether your current approach aligns with your long-term goals and comfort with risk. Together, we’ll make sure your plan is built to stay the course through all kinds of market weather.
Sean Gerlin, CFP®, CPWA®, ChFC®, CLU®, is the Founder and Principal of Envision Wealth Planners, a fee-only financial advisory firm based in the greater Orlando area. Sean specializes in helping high-income families, business owners, and commercial real estate executives align their wealth with their values through a comprehensive Financial Life Planning approach. Learn more about them at envisionplanners.com.
This material has been prepared in collaboration with Crystal Marketing Solutions, LLC, and has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.