Investing In A Roller Coaster Market: Keep Calm And Remember The Basics
If the recent stock market volatility has you feeling like you’re strapped into the front seat of a roller coaster with no seatbelt—welcome to the club. Between inflation, interest rate chatter, tariffs, and unpredictable global events, the markets have been anything but boring. And while it’s tempting to make dramatic moves during volatile times, these moments are precisely when it pays to slow down and remember the timeless principles of smart investing.
Let’s start with the most commonly attempted—and most frequently failed—strategy: market timing.
Unless you own a working crystal ball (in which case, let’s talk), timing the market consistently is nearly impossible. Many investors try to “sell high and buy low,” but more often than not, they end up doing the opposite—selling during dips out of fear and buying back in when it feels “safe” again, often at higher prices. Even missing just a handful of the market’s best days can drastically reduce your long-term returns.
Instead of trying to guess the market’s next move, focus on long-term investing. The market has always had its ups and downs—wars, recessions, pandemics—but historically, it trends upward over time. Staying invested through volatility and continuing to contribute regularly (especially during downturns) can be one of the most effective ways to build wealth.
Risk tolerance also plays a crucial role. If your investment portfolio is keeping you up at night, it might not be a market problem—it might be a mismatch between your investments and your comfort level. Risk tolerance isn’t about how brave you want to be; it’s about how much volatility you can realistically handle without panicking. It’s okay to adjust your portfolio to align better with your personal risk level—just make sure changes are thoughtful, not emotional.
Now let’s talk retirement investing, because not all timelines are created equal.
If you’re in your 20s or 30s, time is your greatest ally. Market dips are less of a threat and more of an opportunity—like a sale on future financial freedom. You have decades to recover from short-term volatility, and the compounding effect of staying invested early can have a massive payoff. In fact, someone who invests $5,000 per year from age 25 to 35 and then stops entirely could end up with more money at retirement than someone who starts at 35 and invests that same amount every year until age 65. Time really is money.
But what if you’re in your late 50s or early 60s, with retirement knocking on the door? Now your investment strategy should shift gears from growth to preservation and income. While you still need growth to combat inflation, your focus should turn to managing risk and protecting the nest egg you’ve built. That means reducing exposure to highly volatile assets, increasing diversification, and ensuring you have enough in lower-risk investments to support early retirement years without having to sell stocks in a downturn.
And here’s a bonus tip for investors of all ages: make sure your investment plan is part of a broader financial strategy. That includes budgeting, managing debt, planning for healthcare, and thinking about legacy goals. Investing is a powerful tool—but it works best when it’s part of a bigger picture.
In short, while the market might be shaky, your financial future doesn’t have to be. Don’t let short-term noise derail a long-term plan. Avoid emotional decisions, stay focused on your timeline, and if you’re unsure how to navigate it all—consider working with a CERTIFIED FINANCIAL PLANNER® who can help keep you on track.
