The last five years have been characterised by economic uncertainty. The Covid-19 pandemic caused significant disruption to the economy, and in the years that followed, countries around the globe faced rising living costs.
While inflation has fallen since its exponential rise during the pandemic, recovery has been slow and there are still many economic challenges to contend with.
To add to this, recent developments in the US have caused a temporary stock market crash that may have affected the value of your investment portfolio. After President Trump announced that he would introduce tariffs – the taxation of goods imported to the US – on many countries, markets reacted poorly.
As a result, you have likely seen the value of your investment portfolio fall.
World leaders are currently negotiating trade deals with President Trump and trying to encourage economic growth, but it’s likely that this period of uncertainty will continue. This might leave you wondering whether you should adjust your investment strategy.
Read on to learn how to invest successfully and avoid common pitfalls during uncertain times.
Tune out the noise and focus on your own financial plan
It’s easy to panic about your investments when the news and social media are filled with sensational headlines about market crashes.
You might see a lot of so-called “advice” online telling you to “cash out now”. Alternatively, some investors might encourage you to increase your contributions and “buy the dip” so you can take advantage of low prices.
In situations like this, everybody has their own ideas about where you should put your wealth, and which investments are “safer” from market volatility.
However, a lot of the advice you see online might come from unqualified individuals. Even if the guidance does come from a place of knowledge, everybody has their own unique goals and attitude to risk.
As such, if you pay too much attention to “noise” from the news or other investors, you could make decisions that don’t align with your financial plan. In some cases, you could make reactionary choices that work against your financial goals.
That’s why it’s crucial to tune out the noise and focus on your own situation and financial aims.
Avoid the temptation to sell your investments
Panic-selling is one of the most common mistakes investors make in a turbulent market. When the value of your investments is continually falling, it’s easy to think that selling to avoid further losses is the best course of action.
However, it’s important that you take a long-term approach to investing and recognise that, in the past, markets have always recovered and continued growing after a crash. This means that if you remain invested for a longer period – perhaps 10 years or more – you’re likely to see positive returns, regardless of any short-term market dips.
For example, figures from the London Stock Exchange (LSE) show that the FTSE All-World – an index of large- and mid-cap companies from around the world – grew by 23.36% between 1 January 2015 and 1 January 2025.
The index, which offers a useful reflection of the global stock market, achieved this growth despite the fact that in this period, we experienced:
- The Covid-19 pandemic
- The war in Ukraine
- Liz Truss and Kwasi Kwarteng’s mini-Budget.
Similar to the recent tariffs, these events all caused a significant market downturn at the time, and you likely would have seen the value of your portfolio fall.
If you had sold your investments, you could have missed out on growth over a longer period once the markets recovered.
Yet, if you resisted the temptation to sell and held your investments for the full period, you would have benefited from almost 25% growth.
While past performance doesn’t guarantee future returns, all market crashes throughout history have played out in this fashion. That’s why you may want to hold your investments and wait for the volatility to pass.
Review your portfolio and check that it is well-diversified
It’s important to avoid making reactionary decisions when markets are in turmoil. That said, a period of volatility could highlight weaknesses or biases in your investments, so it may be a useful time to review your portfolio.
Although Trump’s tariffs have caused worldwide stock markets to suffer, certain areas have been more affected than others.
For instance, This is Money reports that the S&P 500 in the US has fallen by 5.2% since the tariffs came into effect. France’s CAC index also experienced losses of 5.1%.
In comparison, the FTSE 100 in the UK lost 2.5%, while Japan’s Nikkei index contracted by 1.6%.
This means that if your portfolio is heavily weighted towards US stocks, the recent volatility could have affected you disproportionately. On the other hand, if you split your investments across several countries, the effects could have been lessened.
Now may be a useful time to review your portfolio and consider whether it is well-diversified. If there are biases towards certain countries or industries, you may want to make some changes.
We can ensure that your investments are well balanced, so your portfolio can withstand this and any future periods of market volatility.
Get in touch
If you require support during these uncertain times, we are here for you.
Please get in touch to find out how our team of VouchedFor Top Rated planners could help today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.