Simone Bilton, Associate Investment Director at Rathbones, shares her calm, clear-eyed approach to navigating market volatility—reminding us why a little patience (and a lot of perspective) goes a long way.
The popular proverb “Don’t put all your eggs in one basket” has never been more relevant in today’s unpredictable financial markets.
With constant headlines about trade wars, inflation, geopolitical tensions—not to mention the noise from social media and figures like Donald Trump—it’s easy to feel overwhelmed. When stock markets become volatile, the instinct to panic can be strong. How you react (or don’t) can play a pivotal role in the long-term success of your investments.
The Importance of a Long-Term Approach
Market corrections and periods of stock market volatility are a natural part of investing. Historically, the stock market has experienced corrections (defined as a decline of 10% or more) approximately once every two years on average, according to data from J.P. Morgan Asset Management. While these downturns can feel unsettling, they are often followed by recoveries. This is when it makes sense to stand back. Markets over a 1 or 3-month period may appear unnerving, however when looking over a slightly longer term, the S&P 500 (a stock market index that tracks the performance of 500 of the largest U.S. companies) is essentially flat.
Despite market fluctuations, history has shown that economic challenges and uncertainty are not new. Yet, investors today appear more cautious, demanding a higher reward for taking on risk for financial assets. This heightened sensitivity is why we, as wealth managers, consistently emphasise the importance of taking a longer-term perspective (five or more years), rather than reacting to short-term market movements.
One ray of hope is that Trump (and many of his supporters) are highly motivated by financial gains, and a falling stock market will not be viewed favourably by the current administration.
Define your Purpose
As wealth managers, we recognise that every individual invests with a different purpose. That purpose defines their investment time horizon and risk appetite. For instance, someone investing for retirement will likely have a different approach than an individual seeking to grow their capital to purchase their first property.
Almost everywhere you look, there are disclaimers about investing—reminders that market performance is never guaranteed, and capital is always at risk. Your level of experience, knowledge, and emotional resilience all play a role in shaping how you manage investments. It’s important to identify your ‘why’.
While some investors prefer a hands-on approach, others recognise the value of professional guidance.
Why use a Discretionary Investment Manager?
If managing your own money were straightforward and stress-free, there would be little need for professional investment management. However, navigating the complexities of financial markets while balancing personal and professional responsibilities can be daunting and time consuming.
By appointing a discretionary investment manager, you can entrust the management of your portfolio to experts who will align your investments with your objectives and risk appetite. We actively monitor the markets, make informed decisions on your behalf, and seek opportunities while mitigating risks.
Our clients appreciate the peace of mind that comes with professional management, allowing them to focus on their daily lives rather than the emotional turmoil of DIY investing.
The value of investments and the income from them may go down as well as up and you may not get back what you originally invested.
Let’s Talk About Your Investment Strategy
Whether you’re looking to review your existing investments or are just starting your investment journey, we are here to help. Get in touch with Simone to explore how we can support your financial goals. Simone.Bilton@rathbones.com 0161 8377 170
