For the past two years, we’ve enjoyed an unusually smooth ride in the markets. But, as we’ve seen in recent months, things are returning to familiar territory: volatility.

In fact, the last couple of months have served as a reminder – a bit of a rude one – that volatility is a feature, not a bug. The strong returns and unusually low volatility of 2023 and 2024 made it easy to forget that markets rarely move in straight lines. But seasoned investors know: calm never lasts forever.

And you know what? That’s perfectly okay. In fact, it’s exactly how the market is supposed to behave.

🚨 Is This Normal?

Yes. Very much so.

Even in years when markets end strong, there are inevitable dips along the way. According to J.P. Morgan’s Guide to the Markets, the average intra-year pullback for the S&P 500 is around 14%. So, a 10-15% drop during the year isn’t a crisis - it’s a regular part of the journey.

So let’s not fall for the clickbait. Financial headlines aren’t there to inform you - they’re there to grab your attention. And nothing grabs attention like fear. If the media were upfront about how routine these market pullbacks really are, the story wouldn’t sell. So instead, they crank up the drama, frame every dip as a disaster, and watch the panic roll in.

But listen to me - don’t buy into the hype. Don’t let the noise pull you into this madness. Here’s the reality: when you don’t truly understand how markets work, emotions take control. You panic and sell when the market dips, then, when things start to recover, you rush back in. It’s a guaranteed path to losing wealth, not growing it.

Tune Out the Noise

Volatility is uncomfortable, but it’s not something to fear. It’s part of the process. Volatility isn’t a warning sign; it’s the market doing what it’s always done. It’s normal. So, stay focused on what you can control: your strategy, your plan, and your ability to remain calm.

📈 Good Years Don’t Last Forever (And That’s Actually Good News)

Yes, the markets had a rough 2022, but those who stayed the course were rewarded in 2023 and 2024. It felt great to watch portfolios grow with little drama, but let’s be real - it’s unrealistic to expect that smooth ride every year.

Since 1926, the S&P 500 has averaged around 10% returns annually (before inflation, with dividends reinvested), despite negative annual returns occurring about one out of every four years.

So, yes - volatility is normal. And those average returns? They don’t come without some bumps along the way. It’s part of the deal.

🌍 What’s Going On Right Now?

We all know the headlines - one word: Trump. Surprise, surprise, he’s managed to wipe trillions off the global stock market with his new trade tariffs. Quite the talent, huh? Real masterclass in political strategy. I mean, honestly, he probably came up with those tariff numbers using ChatGPT... at least that’s the rumour.

So, what happened next? China fired back with tariffs of its own, and let’s just say, Friday wasn’t kind to the stock market. All three major U.S. indexes dropped by over 5% at market close, and the FTSE 100 saw its worst day in over five years.

Is This the End of the World?

It’s no shock that Donald Trump hasn’t – and won’t – apologise for the recent market downturn. That’s consistent with his usual approach, as I discussed in The Fallacy of Always Being Right. But zooming out, the truth is, this dip - while abrupt - is just another phase in the market cycle.

Nothing to get overly excited about.

The media is loud. People panic. But the most successful investors? They do what they always do during turbulence: they stay in their seats. Why? Because they know this is part of the process. It’s to be expected. 

Think of It Like This:

If you’re on a rollercoaster, you know there are going to be ups and downs. There might be parts that scare you, right? But just because it’s a bit unnerving, are you really going to jump off halfway through? Of course not. The same goes for the markets. Sometimes you’re soaring, other times it feels like a drop - but you’ve got to ride it out. Stick with it, and you’ll get to your destination. Jumping off halfway? There’s only one outcome - and it’s not a good one.

🧘‍♂️ So... What Should You Do?

Keep calm and stay in your seat.

Volatility might feel uncomfortable, but it isn’t dangerous if you’re prepared. In fact, if you’re still in the saving and investing phase of your financial journey, this is good news. You’re buying great companies at a discount.

For those of you already invested, think of these downturns as the “price of admission” for long-term wealth creation.

The key is not to react. The key is to stick to your plan.

If your goals and circumstances haven’t changed, your financial plan shouldn’t either. If your plan is still solid, don’t let the headlines push you into adjusting your portfolio.

💡 Final Thought: This Too Shall Pass

Markets will rise. Markets will fall. But if history is any guide, every decline has been temporary, while growth has been permanent.

Those who win in the long run are the ones who:

• Stay invested

• Stay disciplined

• Stay patient

   

 This turbulence? It will pass.

And when it does, you’ll be glad you stayed the course. ✨