Market Volatility and what it means for you

If you’ve been checking your investments over the last few weeks, you might have noticed some dips. We get it, it’s completely natural to feel uneasy when markets move in dramatic directions like this. But before making any decisions, let’s take a step back and look at what’s really happening.

What’s going on?

Over the last few weeks, the US markets lost all gains that had been made since the election of President Trump. This felt relatively dramatic, and caused portfolios that have lots of US based stocks and funds to fall.

Why did they fall?

As with all market movements, it’s rarely one factor that has caused the movement. This is no exception, and analysts believe that there are a few key issues that are causing the current market dips.

• Tariffs- Trump has been clear on his intention to introduce tariffs and has swiftly announced and attempted to implement tariffs on some of their major trading partners. However, there have been quite a few stumbling blocks, including changes, delays, exemptions for certain products and general confusion. Markets *hate* confusion and uncertainty and these tariff announcements are giving uncertainty in major doses. As a result, whilst this plays out, the markets will likely respond with short term volatility, because everyone is pretty unsure as to what the final outcome will be.

• Geopolitical tensions- All of these tariff talks come amid other global conflicts escalating with Trump’s involvement, including those in Ukraine and Palestine. Again, whilst the outcome of these conflicts is unknown, and the potential outcomes are being stirred up, the levels of uncertainty rise and investors in the markets become fearful. This usually causes short term peaks and troughs.

• The dreaded ‘R’ word – All of these issues then point towards the dreaded word that no one likes to hear: Recession. The tariffs have real potential to cause higher levels of inflation, owing to prices increasing. They also have potential to cause a slowdown in trade, as it simply becomes more complex. Both of these points could cause not just a slowdown in economic growth in the US but also with other trade partners as well as globally. After all, the phrase goes ‘if the US sneezes the world catches a cold’. If investors fear a recession, there is often short term volatility.

Like it or not, these movements are part of investing, and while short-term dips can be uncomfortable, they are also a normal part of long-term growth. A lot of these factors point towards short term movements, but not necessarily underlying issues or long term fear factors.

Sources: Reuters , Investopedia, WSJ, Fidelity

What Can You Do?

Of course, all of that is easier said than done, so let’s take a look at how you can hold tight and not fear the red numbers.

✅ Stay Focused on Your Goals: Market ups and downs are expected, but history shows that long-term investors tend to benefit. Whilst there can be effects of compounding in both the positive and the negative, generally focusing on the end goal can really help.
✅ Avoid Emotional Decisions: Selling investments during a downturn locks in losses, rather than giving your portfolio time to recover. You may also want to think carefully about planned withdrawals and if you’re able to postpone withdrawals whilst markets recover.
✅ Think Long-Term: Investing is a journey—short-term dips shouldn’t derail your bigger financial plans.

We know that market movements can feel overwhelming, but remember: you’re investing for the long term, and volatility is a normal part of the journey. If you have any questions or want to talk through your investment strategy, we’re here to help. If you also want further advice, you can consider speaking with an independent financial advisor.

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If you invest your capital is at risk and your investments can go up as well as down. Past performance is not an indicator of future results.

We’re here to support you! Hold tight, we’ve got this.