Market Volatility: Lessons Learned

The recent period of heightened market volatility has understandably shaken many investors. While it is tempting to react to these day-to-day movements, the past offers important lessons on how best to navigate turbulent times.


"Panic is as contagious as any virus"
Mike Labella, CFA, Head of Global Equity Strategy, QS Investors

Studying the History of Market Downturns

The specific causes of today’s situation are unique, but a look back over the last few decades shows that the stock market (as measured by the S&P 500) has bounced back dramatically after the most significant market downturns.


Cumulative Total Returns of the S&P 500 displayed in a chart

Bounce back from lowest point during four bear markets. For every bear, there’s a bull … and for every bull, there’s a bear.

Practical Strategies for Investors

Investors during these past downturns couldn’t have known with any certainty when or by how much the stock market would recover. Today’s investors can benefit from their experiences, however, adopting practical strategies for market volatility.

Don’t let emotions drive decisions

Investors are being hit with a lot of information about interest rates, COVID-19 and global economic uncertainty. Rather than react impulsively, it makes sense to list out your concerns, revisit your goals and review your long-term investment strategy. If your goals have changed or you no longer think your strategy is appropriate, contact your Financial Professional. He or she can provide valuable perspective and help you decide what, if any, actions you should consider. 

Understand your risk tolerance

Risk is a part of investing. The important thing is to understand how much risk you are willing to assume in pursuit of your goals. Your Financial Professional can help you determine your personal risk tolerance and then use that information to help you construct a long-term investment strategy that suits your needs.

Be diversified

It is impossible to predict the markets with 100% accuracy. That’s why investors opt to spread their assets across different classes and different investments within asset classes. Diversification is not a guarantee against loss, but it can help lessen the impact of any single investment.

Stay invested

Investors who stay the course have historically been rewarded. When you look at market performance over decades, instead of over a single year or two, it shows that gains are often concentrated in just a handful of trading days. The best way to ensure you are in the market on those critical days is to stay in for the long-term.



Investors who were out of the market on the top 10 best days in the last 20 years would have had less than half the gains of an investor who was in the whole period.

Finding Opportunity Amid Chaos:
Strategies for Uncertain Times 

Wild swings in stock and bond prices have tested the resolve of investors. But market volatility can generate moments of great opportunity. 

Featured Resources


Learning from the Lessons of Time Presentation

This presentation provides examples of headlines covering recession and market fears, financial security and ethics over the last 5 decades. Several charts and graphs feature examples of market bounce back and the benefit of a consistent investment strategy.


Market Volatility: Lessons Learned

The past offers important lessons on how to best navigate turbulent times. The specific causes of today's situation are unique, but a look back over the last few decades shows that the stock market has bounced back after the most significant market downturns.

Program Resources