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3 Tips for Facing a Volatile Market

According to a CNBC survey, 31% of investors sold assets due to the uncertainty of stock market volatility.

When looking at the markets, you must understand that unpredictability is inevitable. However, regardless of the uncertainty, there are things to consider when navigating your choices. Ultimately, you want to avoid making rushed or fear-based decisions when facing a volatile market.


Assess YOUR current situation. The markets are not something you can control. Neither are the ebbs and flows that naturally come with them. The only thing you do have control of is yourself, your goals, and your current situation. Always keep in mind important factors such as the time left to retire. The longer you have until retirement, the higher your tolerance for risk can be because of the amount of time you have for fluctuations, which allows your chances to balance out over time.

Creating budgets, managing your emergency fund, and paying down debts are also things you can focus on that are in your control and will always work to your best interest-regardless of the status of the market. Additionally, when considering any changes, ask yourself if they align with your goals in the long term. Considering your primary goals will always help determine what moves make sense and which don’t.

Stay The Course

When dealing with a volatile market, staying the course is likely better so you don’t miss out on any possible market recovery. When things start to feel uncertain, good investors will follow the principle that "time in the market" often beats "timing the market." Market timers believe they can outsmart the market by buying low and selling high, but the implicit and explicit costs of market timing can sometimes outweigh the benefits. Staying the course in the face of uncertainty is most often the way to go.

Bank of America studied investors trying to time the market and the effects of missing just a few days. It found that investors that missed the ten best days from 2010-2019 saw a return of just 95%. Whereas investors that left their money in the market through the ups and downs saw returns of 190%! Missing out on just a few days during a decade can lead to almost half the potential return.

Stay Calm

When in doubt, stay calm. Above all, it is crucial to remain calm during tumultuous times. The last thing you want in any scenario is to make a hasty decision without thinking it through. Timing the market will always be extremely difficult. Adjustments to portfolios should only be made strategically and for the long-term due to the risk of whipsaw with sudden price movements and unanticipated reversals. Investors who stick to their principles and remain steadfast in their goals can positively impact their financial freedom and retirement outcomes.

If you’re wondering how to protect your retirement savings, check out Market Volatility and Your Retirement Savings for a few tips to give you peace of mind regarding your financial well-being.

Investment advice offered through OneDigital Investment Advisors, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital. The materials and the information are not designed or intended to be applicable to any person’s individual circumstances. These statements do not constitute an offer or solicitation in any jurisdiction. If you are seeking investment advice or recommendations, please contact your financial professional.