A turbulent start to 2025 has left many investors feeling uneasy. Ongoing geopolitical tensions have stirred up market volatility, raising concerns about the impact on long-term financial goals. But while uncertainty can be unsettling, there are still strong reasons to stay calm and focused.
The continuing war in Ukraine has caused heightened tension across Europe, prompting the UK and other nations to ramp up defence spending. Meanwhile, the newly instated Trump administration in the US has introduced a series of trade tariffs on international partners, with indications that more may be on the way. These developments have led to increased volatility in the markets, with share prices in various sectors experiencing sharper-than-normal fluctuations.
Indeed, according to the Guardian, the euro STOXX equity volatility index, which tracks market expectations of short- and long-term volatility, reached a seven-month high at the start of March 2025. The index has almost doubled since mid-December 2024, suggesting investors are feeling nervous.
If you’ve noticed your investment values dipping or swinging more than usual, you’re not imagining it — these external events are having a real impact. But even in the middle of all this noise, there are practical steps you can take to regain a sense of clarity and calm.
Markets react strongly to uncertainty
When the future feels unclear, it’s only natural to worry about what might happen next — and the markets often reflect that. Uncertainty is one of the biggest drivers of volatility. Whether it’s new policies, global tensions, or unexpected events, anything that clouds the outlook can shake investor confidence.
In times like these, people often act on emotion — pulling out of investments too soon or making decisions based on fear. This collective response can cause markets to dip even further, creating a cycle of anxiety and reaction.
If you’re feeling unsure about your own investments right now, you’re not alone. But it’s important to remember: market swings are often short-term responses to long-term questions. Staying calm and keeping perspective can help you avoid reacting in ways that might harm your financial goals down the line.
Staying calm could lead to better long-term results
Although it can be challenging, keeping a clear head during periods of uncertainty may benefit your financial future. Here are four key reasons to stay calm when markets are unsettled.
1. Market ups and downs are nothing new
Volatility can feel stressful in the moment, but it’s actually a normal part of investing. Markets go through cycles — and while the timing of recoveries can’t be predicted, history shows they do tend to bounce back.
If you’re investing with long-term goals in mind, like retirement or building wealth over time, the key is not to let short-term dips throw you off course. By staying calm now, you give your investments the chance to recover and grow in the future.
2. A diversified portfolio helps manage the impact of volatility
Media headlines are designed to grab attention — often highlighting the most dramatic market movements. You might see reports like “Tech stocks drop 10%” or “Japanese markets surge,” but these stories often only reflect part of the picture.
Most well-structured investment portfolios are spread across different sectors, regions, and asset types. That means if one part takes a hit, others may hold steady or even rise — helping to cushion the overall impact. Diversification is one of your best defences against market shocks.
3. Volatility can create opportunities to invest at lower prices
Feeling hesitant about investing when everything seems uncertain is completely normal. But sometimes, these uneasy periods offer opportunities — especially for long-term investors.
When prices dip, your money may go further. Whether you’re investing monthly or considering a one-off contribution, market volatility can mean you’re buying at a discount. Over time, this can enhance your potential returns.
That said, it’s important to stay grounded. Make sure any decision fits your financial goals and comfort with risk. And if you’re unsure, speaking to a financial adviser can give you peace of mind.
4. Trying to time the market can prove costly
When markets are volatile, it’s easy to fall into the trap of trying to time your investments – buying when prices dip and selling when they rise.
But in reality, markets are influenced by countless unpredictable factors, making it incredibly difficult to get the timing right. Even experienced professionals with access to in-depth research and analysis often struggle to do so consistently.
Instead of reacting to short-term movements, staying calm and committed to your long-term investment plan is usually the wiser – and more rewarding – approach.
Contact us to talk about your investments
If you have any questions about how your investments are performing or would like to review your investment strategy, please get in touch. We’re here to answer your questions and help you feel confident about your financial future.
Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
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