Patience beats prediction when markets are volatile, according to experts at Vanguard, who have reminded investors that staying invested brings better results than trying to time the market.
The firm highlighted volatility last year surrounding US president Donald Trump’s ‘Liberation Day’ tariffs as an example. Had investors sold out of their investments on 8 April 2025 and returned to markets one month later, their returns would have been 10 percentage points lower today than if they had remained invested throughout (14.4% versus 4.8%).
James Norton, head of retirement & investments at Vanguard Europe, said: “Investing is a marathon not a sprint.
“While volatility can feel unsettling, it is a normal part of investing. Successful investing isn’t about trying to time when to buy or sell, but about having a clear plan, staying invested and contributing regularly. By doing so and maintaining a balanced, diversified portfolio investors give themselves the best chance of investment success and meeting their long-term goals.”
The research noted that the MSCI World index has experienced eight bear markets since 1972, each time recovering and then pushing to new heights, as the below chart shows.
Diversification also matters, however. US tech stocks have dominated returns in recent years but in 2025 a globally diversified portfolio would have made better returns. The report noted that the UK and emerging markets were up 23% versus 11% for the S&P 500.
Lastly, the firm said investors should not fear market highs, noting they are often followed by new records.
“You may feel uneasy when markets are rallying but history shows that markets often go on to reach more highs,” the report found.
