Market Volatility: Why Staying Invested is a Wise Strategy

By Jason Choy, Senior Portfolio Manager, InvestNow – 10 April 2025

Global headlines about economic instability, political unrest, and changing trade dynamics have created a wave of nervousness among investors. It’s understandable—uncertainty can be unnerving. But it’s worth remembering financial markets naturally experience ups and downs. Even the most carefully constructed, diversified portfolios can be affected by short-term market swings.

The best response isn’t panic. It’s patience. Long-term success in investing typically comes from staying calm and committed to proven strategies, even when the markets are unsettled.

Why Markets Fluctuate – And Why That’s Okay

There are countless factors influencing market movements—from economic reports to global events and shifting investor outlooks. While current concerns may revolve around tariffs and conflict, history is full of similar challenges: inflation spikes, pandemics, political shocks and so on. Each time, markets fall—and then climbed back again.

If there’s one reliable takeaway, it’s this: trying to anticipate when volatility will strike is almost impossible, but resisting the impulse to act on short-term fear is crucial.

How to Stay Grounded When Markets Are Shaky

Sharp market moves can trigger emotionally driven decisions—particularly when headlines suggest more trouble ahead. However, successful investors know consistently staying invested tends to outperform trying to jump in and out of the market.

Here are three important principles we follow at InvestNow to help investors stay focused:

1. Be Aware—But Don’t Be Swayed by the Noise

Volatile periods often spark a flood of alarming headlines, tempting people to alter their investments. But trying to outguess the market—whether by pulling money out or waiting for a “perfect” re-entry point—rarely works out well.

Think back to early 2020. Many investors who moved into cash during the COVID-19 market dip locked in their losses, only to miss out when markets rebounded sharply not long after.

What to do instead:

1. Stick to your existing investment approach unless your personal situation—like your goals or risk tolerance—has changed.
2. Investments chosen with long-term goals in mind are usually designed to weather temporary declines.

2. Make a Plan—and Stick With It

Discipline is your best tool during uncertain times. A well-thought-out investment plan gives you structure and helps you avoid decisions based on emotion.

Automated contributions—like setting up a Regular Investment Plan through InvestNow—can be a game-changer. They keep you investing steadily, regardless of how the markets behave.

Just look at KiwiSaver. Its success largely comes down to regular contributions and staying invested. This kind of consistency has helped many Kiwis grow meaningful retirement savings over time.

3. Don’t Put All Your Eggs in One Basket

Diversification is a cornerstone of smart investing. Spreading your investments across a range of asset types, industries, and regions can reduce the impact of market swings. While individual investments may rise and fall, a diversified portfolio helps balance things out.

Why it matters:

Broad diversification tends to smooth out volatility, making it easier to stay the course—especially during rocky periods.

Volatility Is a Normal Part of the Journey

No one can say exactly when stability will return. If the past is anything to go by, markets do eventually rebound. Pullbacks aren’t necessarily something to fear—in fact, they can present opportunities. Lower prices often mean better value for long-term investors.

Bottom line?

Investing is a long game. Volatility isn’t a detour—it’s a feature of the road. Staying informed, sticking to your plan, and keeping your eyes on the long term can help you ride out the bumps and reach your financial goals.

Disclaimer: This information is provided by InvestNow Saving and Investment Service Limited (“InvestNow”). The information and any opinions in this publication are based on sources that InvestNow believes are reliable and accurate. InvestNow, its directors, officers and employees make no representations or warranties of any kind as to the accuracy or completeness of the information contained in this publication and disclaim liability for any loss, damage, cost or expense that may arise from any reliance on the information or any opinions, conclusions or recommendations contained in it, whether that loss or damage is caused by any fault or negligence on the part of InvestNow, or otherwise, except for any statutory liability which cannot be excluded. All opinions and market commentary reflect InvestNow’s judgment on the date of this publication and are subject to change without notice. This disclaimer extends to any entity that may distribute this publication. The information in this publication is not intended to be financial advice for the purposes of the Financial Markets Conduct Act 2013, as amended by the Financial Services Legislation Amendment Act 2019. In particular, in preparing this document, InvestNow did not take into account the investment objectives, financial situation and particular needs of any particular person. Professional investment advice from an appropriately qualified adviser is recommended before making any investment. All Investments involve risk.