Keeping Market Volatility in Perspective: 6 Truths About Investing

Volatile markets can feel like an emotional rollercoaster. One day the market is up, the next day it’s down—and headlines make sure you feel every bump along the way. It’s enough to make anyone second-guess their financial strategy.

But here’s the truth: Volatility is a normal, even necessary, part of long-term investing.

As a financial planner, I’ve had countless conversations with clients over the years about market swings. And while every downturn feels different in the moment, there are fundamental truths about investing that can help you keep perspective when markets get choppy.

#1: This Time Feels Different, But It Isn’t

Every market correction has a story. Whether it’s a global pandemic, rising interest rates, bank failures, or trade wars, each one comes with its own set of scary headlines. It’s easy to believe that this time is somehow uniquely catastrophic.

But here’s what history teaches us: while the cause of volatility may change, the pattern does not. Markets fall. Markets recover. Over time, they rise.

In fact, since 1980, the S&P 500 has experienced a drop of 5% or more in 93% of calendar years—and a 10% correction in nearly half of them, according to research from Fidelity. Yet despite these regular setbacks, the market has consistently regrouped and gone on to reach new highs.

In other words, don’t confuse novelty with permanence. Even when the headlines are unprecedented, market resilience has a long track record.

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly.

#2: Volatility Is the Price of Admission for Long-Term Growth

If investing were easy and risk-free, everyone would be wealthy. But the reality is that long-term returns are the reward for accepting short-term uncertainty. Volatility isn’t a flaw in the system—it’s the cost of participating in it.

In many ways, volatility is the toll you pay on the road to long-term wealth. You can avoid the toll, but the alternate route often leads to lower returns over time.

Despite periods of turbulence, the stock market has historically trended upward. According to State Street, a well-diversified portfolio of U.S. equities has delivered an average annualized return of 10.14% since 1926—despite enduring regular market corrections and occasional bear markets along the way.

For investors focused on retirement, building generational wealth, or achieving long-term goals, volatile markets in the short term aren’t just something to endure. They’re a necessary part of the journey.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

#3: Trying to Time the Market Rarely Works in Your Favor

When markets drop, the instinct to act can be hard to resist. But history shows that trying to time the market often does more harm than good. Even professional investors struggle to consistently get it right.

One of the most telling statistics comes from JPMorgan: over the last 20 years, seven of the market’s 10 best days occurred within just two weeks of the 10 worst days. That means if you pulled out during a downturn—even briefly—you likely missed the rebound.

The numbers speak for themselves. If you had invested $10,000 in the S&P 500 at the start of 2005 and stayed invested through the end of 2024, your investment would have grown to more than $71,000. But if you missed just the 10 best days, your return would be cut in half. Miss the 60 best days, and your original investment would shrink to less than $5,000.

The real challenge isn’t just deciding when to get out—it’s knowing when to get back in. That’s where most investors falter. Long-term discipline, not short-term decisions, is what builds lasting wealth.

 #4: A Sound Plan Is Your Best Defense Against Uncertainty

While volatile markets are inevitable, they don’t have to derail your progress—if you have a solid plan in place. According to the 2024 Schwab Modern Wealth Survey, 75% of Americans with a written financial plan say it helps them feel more in control of their finances, and 96% say it gives them confidence in their ability to reach their long-term goals.

A well-designed financial plan anticipates periods of turbulence. It’s built to help you stay on course, not scramble for the exits. This includes:

• Aligning your investments with your goals, risk tolerance, and time horizon
• Maintaining adequate cash reserves for near-term expenses
• Diversifying across asset classes, sectors, and global markets
• Rebalancing regularly to keep your portfolio aligned and responsive

When your strategy accounts for the unpredictable, you’re less likely to make emotional decisions during market dips. Instead of reacting, you can stay focused on your long-term vision—knowing you’ve already built in the flexibility to weather short-term storms.

That’s the true value of planning: it replaces anxiety with clarity, and guesswork with confidence.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

#5: Emotions Are the Enemy of Long-Term Success

Human beings are hardwired for survival—not investing. Our instincts evolved to protect us from immediate threats, not to help us navigate complex financial markets.

That’s why when markets drop, it’s completely natural to feel anxious or even panicked. But acting on those emotions can be costly.

According to Dalbar’s 2024 Quantitative Analysis of Investor Behavior, the average equity investor significantly underperformed the broader market over the 30-year period ending December 31, 2023. While the S&P 500 delivered an average annual return of +10.15%, the average investor earned just +8.01%—a gap largely driven by emotional decision-making and poorly timed trades.

This is where working with a financial planner can make a meaningful difference. One of the most valuable roles we play is helping you manage emotions during turbulent times. When the market drops, it’s not a signal to panic—it’s a signal to return to your plan, stay grounded, and keep your long-term goals in focus.

#6: Volatile Markets Create Opportunity

Market downturns are never pleasant—but they can present powerful opportunities for proactive investors. With the right strategy and preparation, periods of volatility can actually improve your long-term financial position.

Consider these potential opportunities:

• Tax-Loss Harvesting. Realizing losses on certain investments can offset gains elsewhere, potentially reducing your tax liability.
• Roth Conversions. Converting traditional retirement assets to a Roth IRA while account values are temporarily lower often allows for more tax-free growth when markets recover.
• Buying at a Discount. For investors with available cash or ongoing contributions, market declines offer a chance to purchase quality investments at reduced prices.

Much like a sale at your favorite store, volatility allows disciplined investors to buy valuable assets at a lower cost. However, these opportunities are only available if you’re prepared—and willing to act when others are retreating.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

Staying Grounded in Volatile Markets

Volatile markets can test even the most disciplined investors. The key isn’t to eliminate discomfort but to avoid reacting emotionally. Instead of trying to predict what happens next, focus on what you can control.

Here are a few practical steps to help you stay grounded:

• Revisit your financial plan—not your portfolio balance
• Stick to your investment schedule, especially if you’re using dollar-cost averaging
• Avoid making major shifts without consulting your advisor
• Keep your attention on long-term goals, not short-term noise
• Limit exposure to fear-driven headlines—doomscrolling rarely leads to smart decisions

Uncertainty is part of investing, but you don’t have to face it alone. If you’re feeling unsure about what current market movements mean for your personal goals, this is the perfect time to revisit your plan.

At SageMint Wealth, we help high-net-worth individuals, families, and business owners grow their wealth with purpose. Our mission is to bring clarity to complexity, reduce financial stress, and build strategies that support the life you want to lead—now and in the future.

Let’s make sure your financial plan is positioned to weather any market season. Contact us today to start the conversation.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.