While you’re quietly stressing about the market’s latest wobble - and your emotions are whispering that maybe you should pull your money out - let’s pause for a reality check.

In case the current volatility has clouded your memory: the past two years delivered exceptional returns. The S&P 500 - the benchmark for U.S. stock market performance - was up 24% in 2023 and followed that with another 23% in 2024. Let’s be real, those are some pretty damn solid returns.

For context, long-term averages usually sit in the 8-10% range annually. Even better? The biggest pullback we saw in 2023 was just -10%, and 2024’s worst dip was a short-lived -8% drop that lasted three weeks.

In other words, long-term investors have had it unusually easy these past couple of years - strong returns, minimal volatility. But markets never stay calm forever (and honestly, I’d be worried if they did). So now, chaos enters the scene: loud, erratic, impossible to ignore. Yep - enter Donald Trump.

Trump’s Back, and the Markets Felt It

Ah, Trump - part political wildcard, part reality TV rerun. I’ve already written about his tariff drama, but what’s the latest? He threw a tantrum over the Federal Reserve’s hesitation to cut interest rates. In a Truth Social post, he called Fed Chair Jerome Powell a “major loser” (seriously, how old is this guy?) and hinted at firing him - a move that sent the stock market and the dollar into an immediate dip.

Then came the walk-back. Despite the market turmoil he keeps triggering, Trump doesn’t actually want to crash the stock market - that wouldn’t be good for him. So, not long after, he reversed course, saying he had “no intention of firing” Powell - which, legally, he probably can’t do anyway. But hey, this is Trump. In his world, rules are more like suggestions.

He’s still pressuring the Fed to cut rates, but let’s be honest: if his latest round of tariff tantrums hadn’t sparked so much economic uncertainty, the Fed might not be so hesitant to lower interest rates.That’s Trump economics in a nutshell: noisy, erratic, and tailor-made for headlines - just not for stability.

But here’s the bigger point - and the part that matters to you as an investor:

We’re Forgetting the Lessons of Volatility

The calm of the past two years may have lulled us into forgetting that volatility is normal. It’s not a bug in the system - it is the system.

Let’s reframe what market ups and downs really mean.

1. Volatility Is Normal - And It’s Your Friend

Markets don’t move in straight lines; they zig and zag. That jagged path is called volatility - and despite its bad reputation and the fear it often stirs up, it’s a crucial driver of long-term growth.

A market "correction" - a 10% drop from recent highs - typically happens once every 1 to 2 years, so it’s actually pretty regular. Years like 2023 and 2024, with hardly a blip, are the exception.

Since 2000, the average intra-year decline has been around -16%, yet roughly 75% of those years ended in the green. I know I’ve mentioned this in a previous post, but it’s worth repeating - people seem to forget this.

Even those scary, news-making drops - like 2020’s COVID crash - are part of the game. A 30%+ drop tends to happen about once every five years. They’re unsettling, sure, but they’re not unusual.

So the next time the market dips? Don’t panic. It’s the price of admission for long-term returns.

2. Stick With Your Strategy, Not the Noise

Imagine your financial journey like a sea voyage.

Your strategy is your long-term destination: retirement, education for your kids, leaving a legacy. It’s built around your goals, values, and time horizon.

Tactics are the small adjustments - trimming the sails during storms, adjusting the route temporarily. But unless your life changes significantly, your strategy probably doesn’t need to.

Unfortunately, many investors abandon strong strategies over short-term noise. They react to headlines or market forecasts - most of which are wrong.

Here’s the truth: No one can predict what happens next. Not economists. Not fund managers. Not even the loudest voices on your favourite finance podcast.

Your biggest asset as an investor? It’s not brains - it’s temperament.

“The most important quality for an investor is temperament, not intellect.”  - Warren Buffett

 

That means:

• Patience - letting your strategy play out without micromanaging it.

• Discipline - resisting the urge to jump ship during rough waters (definitely not a smart move).

• Perspective - understanding that market drops are temporary, but growth is permanent.

3. You Can’t Have the Ups Without the Downs

Ever been on a rollercoaster that only goes up? Yeah, me neither. Nothing just goes up forever - not markets, not life. Life has ups and downs, and so does everything else. Even your cash savings don’t really "go up" - over time, inflation eats away at their value. Huh, if you know of anything that only moves in one direction - up - let me know. Seriously. Anyway…

One bad year out of four? That’s normal. And it’s the price you pay for the other three.

Without volatility, markets wouldn’t deliver the returns they do. It’s the uncertainty that creates the opportunity.

Trying to sidestep every downturn is a fool’s game. Success comes not from avoiding dips, but from riding them out.

When markets get shaky - and they will - you’ll have a choice:

• Fear or confidence

• Panic or perspective

Choose confidence. Choose perspective. Every time.

4. Time Is Your Greatest Ally

What happens in the next 6 or 12 months may feel urgent. But if you’re investing for the next 20 or 30 years? It’s a blip on the radar.

The longer your time horizon, the more the odds tilt in your favour. Volatility becomes less noticeable. Compounding works its magic. Those small dips today fade into the background over time.

And if you’re still building your portfolio? Market drops are your friend. You’re buying more at lower prices - that’s future growth on sale.

We don’t know where the market will be by December 2025. But we’re confident about 2035: higher.

Final Thoughts: Stay the Course

The past two years spoiled us. Now the market’s reminding us how it really works.

Volatility isn’t a threat. It’s the reason markets reward patient investors. So when the next dip comes - whether it’s sparked by Trump tweets, global headlines, or something no one saw coming - hold your ground.

Don’t let noise shake your plan. Don’t let fear rewrite your strategy.

Zoom out. Stay invested. Trust the process.

Because the market rewards patience - and those who stay steady.

Your future self will thank you. ✨