Expert insight
3 sage reminders during volatile markets
October 30, 2024
Investing can provoke strong emotions, especially during market downturns. In this short video, Joe Davis, Vanguard's global chief economist, shares three pieces of advice to help investors get through volatile times and, ultimately, be rewarded for that.
Read the transcript
Rebecca Katz: So Joe, you are a real historian of the markets and you've worked at Vanguard for almost 25 years.
Joe Davis: Yes.
Rebecca: So what sage advice do you have for our investors during times of market volatility?
Joe: I give them three things. One is just acknowledging that this is a tough market environment when you have the markets dropping and a lot of things going on. There's negative headlines, there's uncertainty, and you're obviously seeing changes in one's portfolio.
But it brings me to the second point. And that is, markets are fairly quick at discounting new events. Because just as quickly potentially when negative events arise, you can have positive events as well. And that's why negative returns can be really clumped with positive returns almost the next day at times.
And then thirdly, I would just channel our founder, Jack Bogle, because he had this wonderful framework of staying the course. And why he said that is it's not always pleasant, that journey, right? But the reason why stocks outperform bonds or bonds outperform cash-like investments over long periods of time is because there's risk. And it's enduring those negative headlines on occasion that, ultimately, one is rewarded.
Related content:
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- Presidential elections matter but not so much when it comes to your investments (article, issued September 2024)
- A new day for Federal Reserve policy (2-minute video, issued September 2024)
- Market volatility hub (updated October 2024)
Notes:
All investing is subject to risk, including the possible loss of principal. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account.
There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Diversification does not ensure a profit or protect against a loss.
Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.
