Investors often wonder if they should sell their investments when the market hits a rough patch to avoid losses—but patience can be a virtue in volatile markets.
History of Market Ups and Downs
No matter how many times you hear that market sell-offs are “normal,” the experience can be unnerving. This may be especially true today after many investors became used to nearly a decade of remarkable gains and low volatility.
We find that long-term goals benefit from a long-term view of the market by helping you plan for inevitable ups and downs. (Stay up-to-date on our market views with the latest investment outlook.)
What Is Volatility?
Simply put, volatility refers to the frequency and magnitude of up and down swings in performance. There are many ways to measure it, but here we look at times when the stock market rose or fell more than two percent.
Taking a look back, you see that the market’s relative calm from 2012- 2017 was unusual.
Tips for Getting Through a Down Market
History shows that markets have recovered after periods of declines—and even rewarded those who remained invested. Moreover, research shows that trying to time when to buy and sell investments can lower your returns substantially.
We believe keeping your money invested longer will give you the best opportunity to reach your long-term goals. Of course, this doesn't ensure a profit or guard against a loss when markets decline, and past performance is no guarantee of future results.
Find out why bonds still have a role in portfolios.
Investing in Volatile Markets
Regular monitoring of your portfolio’s investment mix is essential in any environment. It’s particularly important now as the market returns to its historically more volatile behavior.
For those close to retirement or other major financial goals, it may be a good time to reevaluate your portfolio’s level of risk. Adding more defensive investments is one strategy that could help you weather market swings.
Explore our variety of mutual funds to adjust your mix, or our asset allocation portfolios do it for you.
Learn more do's and don'ts for volatile markets.
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