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What to do when volatility strikes

Volatility describes periods of unpredictable, and sometimes sharp, market rises and falls. It's natural, but unnerving. Let us guide you.

Important information - the value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon.

" Investors dislike choppy markets but they should embrace them. Price swings provide opportunities for regular investors to buy more investments when they are attractively valued. Volatility can be your friend."

Tom Stevenson, Investment Director

Whatever you do, don't panic

Stock markets rise and fall for all sorts of reasons - interest rate hikes, geopolitical changes, company announcements... the list goes on. And while these movements might make you feel uncomfortable, they're part and parcel of investing.

Here are some things to think about if events outside of your control are making you question your investing decisions.


Review your investment strategy

Has it changed? Or has the world around you? If your strategy is still in line with your goals and objectives - think about sticking with it.


Avoid making rash decisions

Acting in the moment could lock in any losses and impact any potential future gains.


Take the right risks

If increased volatility makes you unduly stressed, make sure you're still happy with the level of risk you're taking.


Check if your portfolio's well balanced

Having a mix of investments (diversifying your portfolio) can help minimise risk during periods of volatility, as no single asset class performs well all the time and in all economic conditions.


Keep some cash set aside

Make sure you have an emergency fund. This way you won't be forced to sell your investments and it gives them a chance to recover.


Set your sights on the long term

Market falls can signal potential opportunities, as prices dip. Markets can - and have - recovered over time (although there are no guarantees).


Stop looking at your account

We fear losses more than we like gains. You'll thank yourself later by not checking in constantly on the value of your investments.


Seek guidance or advice

Our website has plenty of useful guidance that can help you. If you have a relationship manager or adviser, talk to them for reassurance.

Stock markets have overcome setbacks before

Investing is for the long term. Setbacks happen, but history shows that markets do recover. Here's what happens if you invested £100 each month in the FTSE 100 - and stayed invested - since January 1986.

Source: Bloomberg, 30.10.23 based on the FTSE 100 on a total returns basis with dividends reinvested. Chart does not take account of charges which would reduce the amounts shown.

Five-year performance table

(%) As at 31 Dec 2019 2020 2021 2022 2023
FTSE 100 17.3 -11.6 18.4 4.7 7.9

Past performance is not a reliable indicator of future returns.

Source: Refinitiv, total returns in local currency as at 31.12.23.

Our five guiding investing principles


Make smarter investing decisions

Whether you're new to investing, or have been doing it for a while, our five investing principles will help you make smarter investing decisions. From why it pays to stay invested, to managing risk and how to make your pension last.... we take five core principles and show the positive effect they can have on your investments in real terms, although gains aren't guaranteed. 

Read our five principles

Preparing for volatility

A diversified portfolio can potentially help to reduce the effect of volatility. Navigator can present you with multi asset funds to consider based on your inputs, such as, your investment approach, how you'd like your money managed and how you feel about risk. If you'd like a personal financial recommendation, financial advice might be of interest.

Find a diversified fund with Navigator

If you're not sure what to invest in, Navigator helps you find a multi asset fund.

Personal financial advice

Talk to one of our financial advisers about how a personal recommendation can give you peace of mind - especially when times are unsettled.

Important information -  please note that Navigator is not a personal recommendation in respect of a particular investment. If you need additional help, please speak to an authorised financial adviser. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.


How volatility can be your best friend

As uncomfortable and as unwelcome as volatility is, it is survivable and, even more importantly, it can provide good opportunities.

In this article Emma-Lou Montgomery gives us ten important lessons on how to manage volatility.

Why volatility can be your best friend

Ask our experts a question

Each month we'll pick up on your most popular questions and answer them. We're keen to hear about what matters to you, so do drop our experts a line.

Understanding market volatility

It can be worrying when stock markets go down. Our guide will help explain what to do - and what not to do - during times of uncertainty.


Managing investments in uncertain times

What volatility is, and how to deal with it.

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