Stock Market Volatility – Keep Calm!!!

Very recently we have seen wild swings in stock market values triggered by President Trump’s tariff policy.

If you read the newspaper headlines or watched the new or online, you’d think the world was ending due to the hysterical response.

The markets were down heavily for a short period very heavily, then back up a little again, then down etc etc.

To the normal person in the street reading these headlines could be quite daunting, especially if people have money invested in the stock market via their pensions or investments such as Stocks & Shares ISAs.

By very nature money invested in the stock market will be more volatile than other assets like cash, bonds and property for example.

What sometimes comes with a really bad day on the stock market, even a run of bad days on the stock market can also be a really good rally.  If you panic on the bad days, you crystallise that drop in value and miss out on the up turn.

Over the last 20 or so years there have been many moments where the stock market has been really volatile and seen wild swings in value. Thinking the credit crunch, dot com bubble, Brexit, the pandemic, 2022 with Ukraine and worldwide rising inflation and energy costs.

Markets react to these events; some are longer than others. The thing to definitely do is ‘Keep Calm’.

Markets will also rebound in time sometimes immediately some time a bit more prolonged like the credit crunch or 2022.

All Oyster’s clients have very diverse investments invested typically in 1000s of different kinds of assets and holdings which will still feel some of the pain when there is economic turbulence but due to the diversity will hold up well and bounce back in time.

Hopefully if you are reading this your invested assets (not cash, premium bonds, Cash ISAs or property) but other proper investments are also adjusted to match the level of risk you were prepared to take and invested very diversely for a minimum time frame typically of 5 years.

Assuming your money is invested in this way then that is great. Remaining invested over time in the right portfolio and feeling the pain as well as the rally days are very important.

I remember seeing some statistics over a 20-year period showing the stock market and this covered some very black events. Just missing out on the best 8 days (8 recovery days after a fall) over that time frame could account for a 40% lower return in your holdings over that time frame.

So, the message is don’t panic listen to your trusted adviser and things do recover!

If you would like to discuss anything related to this article please do email me michael@oysterfinancialplanning.co.uk, call us on 023 80848410 or pop into our office in Hythe Village.