With higher inflation now a reality in many developed economies, ongoing geopolitical conflict in Ukraine, and renewed trade tensions under President Trump, the possible triggers for market volatility are many.<\/p>\n\n\n\n
And 2025 has certainly delivered.<\/p>\n\n\n\n
In April, both the S&P 500<\/strong> and the MSCI World Index<\/strong> saw sharp drawdowns, roughly 10% and 9%<\/strong> respectively, following the unexpected announcement of new US tariffs. It was a reminder that markets can react swiftly to political and economic uncertainty.<\/p>\n\n\n\n Although both indexes have since recovered and gone on to hit all-time highs<\/strong> by September, this type of volatility is a permanent feature of investing.<\/p>\n\n\n\n While it\u2019s tempting to view these moments as outliers, they are in fact entirely normal.<\/p>\n\n\n\n To prepare you for the probability of more and deeper declines in the months and years ahead, we\u2019ve outlined a few key ideas that may help you stay grounded when others are losing theirs.<\/p>\n\n\n\n A market correction<\/strong> is defined as a 10% decline from a previous high. While that might sound like a significant drop, corrections are more common than most investors realise. They occur about as often as your birthday, nearly every year. Years like 2021, where markets were unusually calm, are the exception, not the rule.<\/p>\n\n\n\n Over the past few decades, the average intra-year market decline has been around -14%<\/strong>, yet most of those years still ended in positive territory.<\/p>\n\n\n\n Every five years or so, markets tend to deliver a deeper fall, somewhere in the region of -30% or more<\/strong>. We saw this in:<\/p>\n\n\n\n These kinds of declines are not anomalies. They\u2019re part of the rhythm of investing.<\/p>\n\n\n\n Markets don’t move in straight lines. They fluctuate around a long-term upward trend. That fluctuation is what we call volatility<\/strong>, and it\u2019s not going away.<\/p>\n\n\n\n Unfortunately, no one can reliably predict when the next drop will come or how deep it will be. To be a successful long-term investor is to accept this with humility.<\/p>\n\n\n\n When we perceive a threat, our instinct is to run. It\u2019s how we\u2019re wired. But a market decline is not a predator. It\u2019s not a fire, a flood, or a crisis that demands escape. It only becomes dangerous if you panic.<\/p>\n\n\n\n Market declines are a regular part of life. Your mindset when they happen will determine your outcomes far more than the decline itself.<\/p>\n\n\n\n You have the advantage of being a long-term investor. That means you\u2019re playing a completely different game than the traders and news cycle followers. What happens in the next 30 days has little relevance to your 30-year plan.<\/p>\n\n\n\n Over the long term, the odds are stacked in your favour if you stay the course.<\/p>\n\n\n\n Markets produce positive returns roughly three out of every four years<\/strong>. The losing year earns you the other three. It\u2019s the cost of admission for participating in global growth and innovation.<\/p>\n\n\n\n Temporary declines are not in the way of long-term returns. They are the reason those returns exist.<\/p>\n\n\n\n The stock market is a tool that transfers money from the impatient to the patient.<\/p>\n\n\n\n When prices fall, long-term investors don\u2019t lose. They accumulate. If you’re still saving, market drops are your friend. They let you buy more of the same investments at cheaper prices, boosting your long-term return.<\/p>\n\n\n\n Investing success requires rational thinking under uncertainty. That\u2019s not always easy. But the alternative, reacting emotionally and abandoning your plan, almost always leads to worse outcomes.<\/p>\n\n\n\n We encourage you to stick with your plan, lean on your advisor, and stay focused on what really matters.<\/p>\n\n\n\n We don\u2019t know where the market will be six months from now. But we have a good sense of where it will be in ten years: likely much higher.<\/p>\n\n\n\n Time is the enemy of market declines, and the ally of every patient investor.<\/p>\n\n\n\n If you\u2019re ever unsure whether your portfolio or strategy is still aligned with your goals, you don\u2019t have to guess.<\/p>\n\n\n\n That\u2019s what we\u2019re here for. <\/p>\n","protected":false},"excerpt":{"rendered":" The Permanent Challenge of Temporary Declines With higher inflation now a reality in many developed economies, ongoing geopolitical conflict in Ukraine, and renewed trade tensions under President Trump, the possible triggers for market volatility are many. And 2025 has certainly delivered. In April, both the S&P 500 and the MSCI World Index saw sharp drawdowns, […]<\/p>\n","protected":false},"author":1,"featured_media":610,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-608","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/posts\/608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=608"}],"version-history":[{"count":1,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/posts\/608\/revisions"}],"predecessor-version":[{"id":611,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/posts\/608\/revisions\/611"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=\/wp\/v2\/media\/610"}],"wp:attachment":[{"href":"https:\/\/gotofinance.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gotofinance.ie\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What You Should Know<\/h3>\n\n\n\n
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How You Should React<\/h3>\n\n\n\n
Time Heals<\/h3>\n\n\n\n
\ud83d\udc4b Need Reassurance?<\/h3>\n\n\n\n
Let\u2019s work the plan, not react to the noise.<\/p>\n\n\n\n