Beautifully Frugal: Should You Keep Investing Right Now?
Recently, during a client meeting, someone asked me a simple but powerful question: “Should I keep investing when the market is volatile?”
It’s a question I’ve heard more than once, and honestly, it’s one I’ve asked myself over the years. Whether you’re a seasoned investor or just starting out, volatility can feel unsettling. Watching the market swing up and down—sometimes dramatically—makes it easy to second-guess your strategy.
The short answer? Yes, you should keep investing—but with perspective, patience, and a plan. Let’s walk through why that is, what market volatility actually means, and how to approach it with confidence.
What Is Market Volatility?
Market volatility refers to the rate at which the price of a security rises or falls over a given period. Low volatility suggests stable, predictable prices, while high volatility indicates significant price swings, often caused by economic events, policy changes, or shifts in investor sentiment.
For example, the announcement of new tariffs in April 2025 demonstrated how quickly markets can react to uncertainty. Other triggers—such as interest rate hikes, inflation concerns, or legislative changes can also prompt similar market movements.
Why Long-Term Investors Should Stay the Course
When the markets decline, the instinct to take immediate action is understandable. However, reacting emotionally to volatility can be costly. Selling during a downturn may mean missing the recovery and some of the market’s biggest gains often happen shortly after the worst days.
Consider the COVID-19 market crash in 2020; an investor who placed $100,000 in an S&P 500 fund at the start of January 2020 and remained invested would have seen their portfolio grown to over $121,000 by the end of 2022. Similarly, during the 2018 trade war, a $100,000 investment at the beginning of 2018 would have fallen to around $94,000 by year-end, but by staying invested, that portfolio could have rebounded to more than $123,000 by the end of 2019.
Three Smart Strategies for Navigating Volatility
1. Maintain Perspective and Avoid Panic
Market corrections are a normal part of investing and have always been followed by recoveries. Over time, markets have demonstrated a consistent upward trajectory despite temporary setbacks. Reacting impulsively by selling during downturns can result in missing out on the markets strongest recovery period. Remaining invested increases your likelihood of benefiting when the market rebounds.
2. Keep Investing, Even When it Feels Uncomfortable
If you make regular contributions to your investment accounts, maintain this practice even when the markets are volatile. In fact, this is where dollar-cost averaging shines. Dollar-cost averaging enables you to purchase more shares when prices are low and fewer when prices are high, thereby reducing your average cost over time. Volatile markets can also present attractive buying opportunities, particularly if you have cash reserves. For those concerned about liquidity, investment vehicles such as ETFs can offer flexibility and real-time access to the market.
3. Stick to the Plan, and Lean on Your Advisor
Your investment strategy is designed with your long-term goals in mind. Volatility is a natural part of the investment journey, not a detour. Your advisor isn't just there to build your portfolio, they’re there to help you remain focused during turbulent periods. If you feel unsure about your next steps, talk to your advisor before making changes. Sometimes small adjustments are appropriate, but wholesale shifts driven by fear often do more harm than good.
Should You Keep Investing When the Market is Volatile?
Yes—if you stay focused on your long-term goals, invest consistently, and trust the process, you're setting yourself up to weather the storms and benefit from the recovery.
If you’d like help reviewing your investment plan or navigating uncertain times, we’re here to support you. Reach out anytime—we’re in this for the long haul, just like you!
