Accepting and preparing for market turbulence

If you’re invested in the stock market, let’s be honest, it doesn’t always go hand in hand with feelings of calm! And that’s ok because markets fluctuate, it’s how those fluctuations are handled and prepared for that make all the difference. 

Stock market investing is a well-regarded prudent long-term strategy for many investors. Throughout your investing life you’ll no doubt experience many market dips. Only by maintaining a long-term focus and staying invested will you benefit from the recoveries that typically follow. We’ve all heard about ‘time in the market’ (versus ‘timing the market’) as an approach to long-term investing, which highlights the importance of the length of time spent in the market rather than trying to predict the best times to buy or sell. This strategy is based on the belief that, over time, the stock market will provide a positive return despite periods of volatility. 

Don’t risk selling your investments and sitting in cash during stock market downturns, you will typically underperform those who remain invested.  

So, focus on keeping calm and retain your composure, block out any ‘noise’ because it’s a known known that markets are reactive and fluctuate, it’s normal. Set realistic expectations and goals, and build a diversified portfolio across a broad spread of investments and global markets, so you can benefit from investments that may perform well when others are falling, it’s all in the planning. 

Always in control 

If you’re mentally prepared, realistic, have a strategy and are supported by professional advice, you’ll navigate the choppy waters feeling settled and in control. 

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.