Market volatility can feel like turbulence mid-flight — uncomfortable, disorienting and a little nerve-wracking. But here’s the thing: Just like turbulence doesn’t mean a plane is off course, a choppy market doesn’t mean your long-term financial plan is off track.

If you have a solid investment strategy in place — call it your financial “flight plan” — the best thing you can do is stay the course and avoid making emotional decisions. In my experience, successful investors aren’t the ones who make the most trades — they’re the ones who understand what they own, why they own it and how it fits into their bigger picture. 

Why volatility feels worse than it is

The market doesn’t like surprises. It can adjust to bad news as long as the information is accurate. But uncertainty? That’s when things get bumpy. Political noise, global conflicts and surprise interest rate adjustments can create unpredictability that temporarily rattles portfolios and inspires emotionally charged headlines.

Volatility, by itself, is not a crisis. In fact, for long-term investors, it often represents opportunity. The key is resisting the urge to react emotionally to short-term movements inside long-term portfolios.

Unfortunately, this is where many people struggle.

The cost of emotional investing

When markets dip, the instinct to “do something” kicks in. The most common mistake I see investors make in volatile times is trying to time the market — jumping out when things look bleak and jumping back in when things feel “safe.” But by then, the damage is often done. Markets move quickly. By the time the average investor receives any sort of relevant news, the event has already occurred, and opportunities to adjust have likely passed.

There’s a well-documented gap between market returns and investor returns, highlighted in the 30th Annual DALBAR Quantitative Analysis of Investor Behavior. In 2023 alone, the average equity investor underperformed the S&P 500 by a staggering 5.5% — one of the largest gaps in a decade. Over the past 30 years, the average equity investor has consistently lagged behind the index, not because of poor investment options but because of poor investor behavior. Investors often panic, sell in downturns and buy in upswings —emotional decisions that negatively compound over time.

In short: the average investor’s emotional decisions led to long-term underperformance. That’s why discipline matters. You need a strategy that keeps you grounded when the headlines don’t.

Time, not timing

This is the phrase I come back to most: It’s not about timing the market, it’s about time in the market. You don’t need to buy at the perfect low or sell at the perfect high. What matters is staying invested consistently and giving your money time to grow.

A study by Capital Group illustrates this well. It looked at two hypothetical investors who each put $10,000 per year into the same fund. One always invested at the market’s peak — the statistically worst timing. The other always invested at the bottom — statistically the best possible timing. After 20 years, their returns were remarkably similar — less than a 2% difference.

In other words, perfect timing wasn’t necessary. Consistency was. If perfect timing is not only impossible but only makes a 2% difference, is it worth fretting over?

A plan that fits the journey

A well-structured plan rooted in your unique goals, connected to your risk tolerance and consistent with your time horizon will help provide a steady course, even when the market feels turbulent. When your portfolio is aligned with your plan, you don’t need to check market prices daily or panic during a down week. You already know what you’re aiming for — and have a strategy for getting there.

From my experience, the investors who thrive over time tend to:

• diversify thoughtfully;
• invest consistently, regardless of market conditions;
• avoid chasing headlines or trying to time the market; and
• rely on professional guidance to stay focused and level-headed.

That last point is crucial. One of the most valuable roles an adviser can play is helping coach behavior when emotions are high. Stepping out from daily noise to expand your perspective to see the bigger picture will help you stay committed to a well-crafted plan.

Final thought

Markets rise and fall. They always have and always will. But when you zoom out, a powerful pattern emerges.

According to historical market data from Morningstar Direct, annual stock market returns have been positive about 73% of the time since 1926. Over rolling five-year periods, that number jumps to 87%. Across rolling 15-year periods? Positive 100% of the time. Not a single 15-year period on record has delivered negative returns.

While no plan can eliminate all risk, history shows that investors who stay the course are consistently rewarded over time.

The next time volatility hits, don’t ask, “Should I get out?” Instead, ask, “Is my plan still aligned with where I’m headed?” If the answer is yes, stay the course.

Don’t hit the eject button just because things feel uncertain.

Trust the process. Lean into your strategy. Though volatility can make it tempting to react, remember that long-term success comes from patience, not prediction.

The opinions expressed are those of Paul Twedt as of the date stated on this piece and are subject to change. This material does not constitute investment advice and is not intended as an endorsement of any specific investment or security. Please remember that all investments carry some level of risk, including the potential loss of principal invested. Indexes and/or benchmarks are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Diversification and strategic asset allocation do not assure profit or protect against loss.

Paul Twedt, RICP, CLU, ChFC, is a private wealth adviser with Aria Financial Services.