Stay the Course: Why Staying Calm in Market Volatility Matters
The beginning of 2025 has been a turbulent ride for financial markets, and if you’re feeling uncertain, you’re not alone. The recent swings on the Australian and global share markets have tested even the most experienced investors.
But in times like these, perspective is more important than prediction.
🌩️ Weathering the Storm
Global markets saw wild swings in April:
- On Monday, April 7, the ASX suffered a 4.2% loss, the worst single-day drop since 1992.
- Just three days later, Thursday, April 10, the ASX rebounded by 4.6%, buoyed by a 9.5% rally in the US S&P 500 the day before.
Net swing: a massive 8.8% within one week.
One Week S&P ASX300 Performance (April 7–10, 2025)
🤯 Why Timing the Market Rarely Works
It might feel natural to try to sidestep volatility by moving to cash and “waiting it out.” But history teaches us this is often a costly mistake.
Let’s look at a hypothetical investment of $10,000 in the S&P/ASX 500 Index (1950-2024):
Market Cycles: Hypothetical Growth of $10,000 Invested in the S&P 500 Index (1950-2024)
Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. For illustrative purposes only. Data Sources: Morningstar and Hartford Funds, 2/25.
Avoiding the market’s downs may mean missing out on the ups as well. Seventy-eight percent of the stock market’s best days have occurred during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%.
Good Days Happen in Bad Markets
S&P 500 Index Best Days: 1995–2024
Missing the Market’s Best Days Has Been Costly
S&P 500 Index Average Annual Total Returns: 1995–2024
Past performance does not guarantee future results. For illustrative purposes only. Data Sources: Ned Davis Research, Morningstar, and Hartford Funds, 1/25.
Key Insight: The best days in the market often come right after the worst. Trying to jump in and out can mean missing the rebound – and losing long-term gains.
🧠 Behaviour Matters More Than Brilliance
It’s well-documented that losses feel about twice as painful as gains feel good. That emotional bias drives many to sell at the worst time – in panic.
But here’s the opportunity:
Investors who simply avoid the big mistakes tend to do better than those trying to outsmart the market.
That’s why structure, discipline, and a long-term strategy matter more than ever.
🧭 What to Do in a Volatile Market?
We don’t know where the bottom is. No one does. But history tells us one thing:
Markets recover. Always have. Always will.
So what should you do?
- Stay invested. The cost of panic selling is high.
- Revisit your goals. Has anything changed in your life or investment time frame?
- Ignore the noise. Headlines grab attention, not financial success.
- Talk to us. If you’re feeling uneasy, we’re here to guide you.
💬 Final Thoughts
Investing isn’t about predicting the next big move. It’s about resilience, patience, and planning.
So if you have a head for shares, make sure you also have the stomach. Volatility is the price we pay for long-term returns – and the reward goes to those who stay the course.
