Navigating volatility: Staying invested in a world of uncertainty

Markets can feel unsettling when headlines are dominated by inflation, geopolitics and shifting rate expectations. But volatility is a normal part of investing – it's how you respond that matters.

Volatility is part of investing

Markets rise and fall as news and events unfold, adjusting quickly as expectations change.

While the causes of market swings can change, one thing remains the same: markets tend to recover over time. Periods of uncertainty are often followed by renewed confidence. See Chart 1.

Chart 1: Stay the course – equity markets tend to recover in the long-run
Past growth scares and bear markets – S&P 500 index returns since 1987

The same applies when markets are rising. Even when stocks hit new highs, that alone is not usually a reason to step aside — as Chart 2 shows.

Chart 2: Stocks tend to perform well following record highs
Average forward performance of U.S. stocks following a month that had an all-time high or not (1/1/1986 – 4/30/2026 %)

Why staying invested can help make a difference

When markets fall, it can be tempting to move to cash and wait for things to settle. But trying to time the market is extremely difficult and often backfires.

Some of the market’s strongest days come close to its weakest. Miss even a handful of rebounds, and long-term returns may suffer.

Staying invested puts you in a better position to benefit when markets recover

Chart 3: Missing top-performing days can hurt your return
Hypothetical investment of US$100,000 in the S&P 500 Index over 20 years (2005-2024)

Finding opportunity in uncertain markets

Volatility can feel uncomfortable, but it may also create opportunity.

Sharp market moves may create temporary mispricing, where assets trade below their longer-term value. For disciplined investors, that can create compelling entry points.

Just as importantly, periods like these can be a useful reminder to focus on what you can control:

• Having a clear investment plan
• Staying disciplined during market swings
• Avoiding emotional, short-term decisions

Investors who stay focused on long-term goals are often better placed when conditions improve.

Stay focused. Stay invested. Stay ready.

When markets are noisy, the most powerful moves are often the simplest: keep perspective, stay invested and stick to a plan.

Three simple principles can help:

• Stay disciplined: Avoid making decisions based on short-term emotions
• Stay diversified: Spread risk thoughtfully across investments
• Stay invested: Allow time to work in your favour

You can’t avoid uncertainty, but you can be ready for it. A clear plan, steady discipline and smart diversification may help you ride out market swings and stay open to opportunity.

Building a portfolio that can weather change

Diversification remains one of the most important ways to stay invested through uncertainty. Recent years have shown that while diversification still matters, how you diversify may need to evolve.

Many investors have long relied on a mix of stocks and bonds to balance risk, but in recent years that has not always worked as expected. That’s why it can make sense to think more broadly about how your portfolio is built.

A more resilient portfolio could include:

• Diversification across asset classes to avoid reliance on a single market driver
• Exposure to different regions and sectors to help manage localised risks
• Access to alternative or low-correlation strategies, which may behave differently from traditional markets

You can’t control market uncertainty, but you can aim to build a portfolio designed to withstand it — and that can make all the difference over the long term.