The Volatility Survival Guide for High-Net-Worth Investors

“Market volatility is nothing new. Throughout history, markets have moved in cycles — periods of expansion followed by contraction. While these fluctuations are a natural part of investing, they can understandably feel unsettling in the moment.”

“Market downturns, or bear markets as they’re called, are a part of investing. On average, they happen every three and a half years with a typical decline around 32%, lasting about 10 months. But it’s really important to remember that bear markets are usually much shorter than the bull market — the upswing — which often lasts over four years.”

“Markets have weathered a lot over the years — wars, recessions, pandemics, and policy shifts. Even with these events, markets have continued to trend upward over time. But as human beings, we’re hardwired to be risk averse, so these sharp swings can and usually are uncomfortable.”

“The market has sold off for various different reasons, and there have been different recovery periods — but the market has always recovered. It has always bounced back. And the clients and investors that maintain discipline and a long-term focus during downturns are almost always better positioned on the other side of it.”

“I think it’s human nature to want to avoid losses — sometimes even more than we want to achieve gains. That feeling is called loss aversion, and it can lead us to make choices based on fear rather than data, logic, and statistics.”