Portfolio construction

Three reasons to stay invested in volatile times

April 16, 2025 - 5 min

Selling your investments when markets appear to be in crisis mode may feel like the right thing to do. However, decades’ worth of market data show that staying invested through volatile times has been a smart route to take to pursue long-term financial goals. For millennial investors who may not have experienced the sharp market declines of the Financial Crisis of 2008–2009, today’s extremes may be even more unsettling. But if you’re investing for goals 5, 10 or 30 years away, here are three reasons why you should avoid emotion-based investment decisions.

1. Markets have historically been resilient: Despite facing decade after decade of wars, virus outbreaks, natural disasters, recessions, and financial crisis, markets continued to climb higher over the past 30 years. Consider how these hypothetical $10,000 investments allocated to stocks and bonds grew over 30 years, ending 12/31/2024.

Cumulative growth of $10,000

For illustrative purposes only. Periods chosen are based on start of drawdown to maximum drawdown and recovery period. Indexes are not investments, do not incur fees and expenses, and are not professionally managed. It is not possible to invest directly in an index. Past performance is no guarantee of, and not necessarily indicative of, future results. Source: Portfolio Analysis & Consulting. FactSet.

2. Cashing out has historically meant missing out: Investors who panic and sell often miss the upside if markets rebound. Consider what missing out on the 20 best days in the US stock market over the past 20 years would have meant to the growth of a hypothetical $10,000 investment in the S&P 500^® index. In 20 years, if you stayed fully invested, that investment would have grown to $99,488, compared to only $28,500 if you missed the 20 highest returning days.

Cumulative growth of $10,000

20 Best Days for the S&P 500^® index between 12/31/04 and 12/31/24. For illustrative purposes only. Indexes are not investments, do not incur fees and expenses, and are not professionally managed. It is not possible to invest directly in an index. Past performance is no guarantee of, and not necessarily indicative of, future results. Source: Portfolio Analysis & Consulting. Morningstar.

Now look at the returns of the US stock market leading up to the best 20 days over the past 20 years. Investors who sold during these turbulent months would have missed out on market recoveries in the following months or years.

20 best days in the S&P 500^® over the past 20 years were typically preceded by poor market performance. Cashing out amid volatile markets can prove costly in the long run.

3. Time is on our side: As a long-term investor, it’s wise to remember that it’s not a “timing” issue, it’s just an issue of time. Consider how staying invested over the long term has historically added up. This hypothetical $10,000 investment in the S&P 500^® Index over 20 years, ending 12/31/2024, grew significantly – despite several volatile short-term market events.

$10,000 hypothetical investment in the S&P 500^® Index over 20 years

$10,000 hypothetical investment in the S&P 500 Index over 30 years

The chart reflects the hypothetical investment of $10,000 in the S&P 500^® for 20-year periods ending December 31, 2024. For illustrative purposes only. Indexes are not investments, do not incur fees and expenses, and are not professionally managed. It is not possible to invest directly in an index. Data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Source: Portfolio Analysis & Consulting. FactSet.

S&P 500^® Index is a widely recognized measure of US stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation, among other factors. It also measures the performance of the large-cap segment of the US equities market.

This is provided for informational purposes only and should not be construed as investment advice. References to specific securities or industries should not be considered a recommendation. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers Solutions or any Natixis Investment Managers affiliates. There can be no assurance that developments will transpire as forecasted and actual results will be different. Data and analysis do not represent the actual or expected future performance of any investment product. We believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. The information is subject to change at any time without notice.

Index information is used to illustrate general asset class exposure and not intended to represent performance of any investment product or strategy. It is not possible to invest directly in an index. Investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided. All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

NIM-04082025-wk38s929