Recent market turbulence – sparked by geopolitical tensions, shifting trade policies, and economic uncertainty – has left many investors uneasy. While volatility can be unsettling, it’s important to remember that market fluctuations are a normal part of investing. Even well-diversified, long-term portfolios experience short-term swings.

The key to navigating these periods isn’t reaction – it’s discipline. By focusing on time-tested investing principles, you can avoid costly emotional decisions and stay on track toward your financial goals.

Why volatility happens (and it’s normal)

Markets move in response to countless factors: economic data, geopolitical events, and shifts in investor sentiment. While today’s headlines focus on tariffs, investors have already weathered similar storms – pandemics, inflation surges, and global conflicts – each triggering temporary pullbacks before markets eventually recovered.

History shows that despite short-term turbulence, markets have consistently rebounded and reached new highs over time. The challenge isn’t predicting volatility – it’s resisting the urge to react to it.

How to navigate market turbulence

When markets swing, fear-driven headlines can tempt investors to make impulsive moves. But successful investing isn’t about timing the market – it’s about time in the market.

With that in mind, here are three essential InvestNow Investing Principles to keep at the forefront and help you stay the course.

1. Stay informed, but don’t react to the noise

During periods of volatility, fear-mongering headlines and emotions can tempt investors to make reactive decisions. However, attempting to time the market – by selling during downturns or waiting for the “perfect” moment to reinvest – more often than not leads to missing out on the market’s eventual recovery.

Just ask the investors who switched to cash or more conservative investments during the initial Covid-19 market volatility. Rather than sheltering their portfolio, many simply ended up crystallising losses and missing out when the market roared back up just months later.

What to do instead:

• Stick to your strategy unless your personal circumstances (goals, timeline, or risk tolerance) have changed.
• Remember: An investment chosen for long-term growth should remain fit for purpose, regardless of any short-term volatility.

2. Have a plan (and stick to it)

Investors need discipline to ride out any market volatility, and having a plan in place will help with this immensely. A well-structured investment plan – based on your goals, timeline, and risk tolerance – helps you tune out emotional decision-making.

Automating contributions (such as setting up a Regular Investment Plan at investnow.co.nz/invest/regular-investment-plans/) enforces discipline, and ensures you keep investing and making progress towards your investment goals regardless of market conditions.

The proof? KiwiSaver’s success is built on this principle. By automating contributions and removing emotion out of the equation, many everyday New Zealanders have become successful, disciplined investors and built meaningful nest eggs for their retirement.

3. Diversification is essential

A diversified portfolio – spread across asset classes, sectors, and geographies – can help cushion against extreme swings. While individual stocks may fluctuate, a well-balanced portfolio smooths out volatility, making it easier to stay committed.

Key benefit: A well-diversified portfolio generally has less swings and roundabouts (particularly during volatile times), which should reduce stress and limit knee-jerk reactions.

Volatility isn’t a roadblock– it’s part of the journey

No one can predict when markets will stabilise, but history shows they always do. For disciplined investors, short-term pullbacks aren’t a signal to retreat – in fact investors who stay the course during pullbacks often benefit – temporarily lower prices mean more value for every dollar invested, setting the stage for stronger long-term return.

The bottom line?

Investing is a marathon, not a sprint. Market volatility isn’t a detour – it’s part of the journey. By staying informed, sticking to your plan, and maintaining a long-term perspective, you’ll be well-positioned to weather any financial storm and emerge stronger on the other side.