Staying invested during volatile market times can be challenging due to the natural emotional instinct to protect assets from short-term losses. But historical data and investment principles suggest that maintaining a long-term perspective and staying invested is often the more profitable strategy. The recent market increase on Wednesday, April 9, after President Trump announced a 90-day hold on tariffs, highlights the unpredictable nature of financial markets, but it also underscores the potential benefits of staying invested.  If you had moved out of the market at the end of March, then you would have missed out on a significant day of recovery.

Market volatility is characterized by rapid and significant fluctuations in asset prices, often triggered by geopolitical events, economic changes, or health crises, such as COVID-19. During these periods, investors may feel compelled to sell their investments to avoid further losses, but this decision can lead to missing out on subsequent market recoveries.

Key Considerations:

• Long-term Gains: Historically, markets have shown a trend of recovering and growing over the long term, even after significant downturns.
• Risk of Timing the Market: Attempting to time the market by selling during downturns and buying back during recoveries often results in buying high and selling low, which can erode overall returns 

Staying invested during market volatility allows investors to benefit from the eventual recovery of their investments. It is crucial to maintain a consistent investment strategy rather than trying to time the market.

Benefits of Long-term Investment

1. Compounding Returns: Long-term investments have the potential to generate higher returns through compounding, where earnings on previous years' returns add up.
2. Avoiding Missed Opportunities: By staying invested, individuals avoid missing out on the best-performing days in the market, such as April 9, 2025. These days can occur even during downturns and are crucial for overall portfolio growth.
3. Risk Management: Diversifying investments and rebalancing portfolios can help manage risk during volatile periods, ensuring that the investment mix aligns with the investor's risk tolerance and long-term goals.

So, how do you stay the course when the markets are a rollercoaster?

• Emotional Control: Managing emotions during market volatility is key. Investors should focus on long-term goals rather than reacting impulsively to short-term fluctuations.  I know this is sometimes easier said than done.
• Financial Planning: Having a well-structured financial plan helps investors stay on track with their long-term objectives, even during times of market uncertainty.
• Regular Investments: Continuing to invest regularly can help take advantage of lower prices during market downturns, potentially increasing overall returns over time.  This is also known as dollar cost averaging.

While market volatility may trigger anxiety among investors, staying invested and focused on long-term goals is generally the more rewarding strategy. By maintaining a consistent investment plan and avoiding impulsive decisions, investors can maximize their chances of achieving their financial objectives despite market lows and highs.

If you need a better investment strategy, want to understand your investments better, or simply want expert brains to manage your money, please visit bgip.ca and schedule a no-pressure appointment to chat.

If you want to read more about investing and future-proofing your finances, read more on my blog theinvestorscorner.ca

We are here for you.

Brian Gribben and the BGIP team.