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How to stay on track in a volatile market: The four pillars of long-term investment success
Jacob Falkencrone
Global Head of Investment Strategy
Key points:
- Volatility is normal—think long-term. Checking your portfolio daily fuels anxiety, but history shows that long-term investors always come out ahead. The S&P 500 has never delivered a negative 15-year return since World War Two.
- Diversification and discipline are your best defense. A well-balanced portfolio helps cushion downturns, while sticking to your strategy prevents costly emotional decisions.
- Consistency and low costs drive success. Regular investing and minimizing fees maximize your long-term returns—even in uncertain markets.
Let’s be honest—investing isn’t particularly easy (or fun) right now. The market is all over the place. One day, stocks are up on optimism. The next, they’re down because of a new round of tariffs or fears of an economic slowdown.
The S&P 500 is swinging wildly, and the “Magnificent 7”—Tesla, Nvidia, Alphabet, Meta, Amazon, Apple, and Microsoft—have collectively lost over USD 1.5 trillion in market value in just a few months.
It’s no wonder investors are feeling nervous. But here’s the thing: market volatility isn’t a bug—it’s a feature. Since 1949, nearly half of all daily market returns have been negative. If you check your portfolio every day, you’re going to see a lot of red. But zoom out, and the picture changes completely. Over a 15-year period, the S&P 500 has never delivered a negative return—not once.
The market rewards patience and discipline. It punishes panic and short-term thinking. So if you’re feeling the urge to sell everything and sit in cash, stop. Now is the time to focus on what really matters: the long game. The most successful investors aren’t the ones who predict the next crash. They’re the ones who stick to a strategy and stay in the game.
And to do that, you need to build on four time-tested pillars of investment that will help you ride out the storm—and come out stronger on the other side.
Pillar 1. A long-term perspective: Ride out the storms
Short-term market swings can feel brutal. Prices fluctuate wildly based on things like trade policies, interest rates, corporate earnings, and even investor emotions. But zoom out, and you’ll see that over decades, markets tend to go up.
Look at what’s happening right now: The market is down due to uncertainty around tariffs and a potential recession. But we’ve been here before. Trade wars. Recessions. Wars. Banking crises. Pandemics. Political instability. The market has faced it all—and still, long-term investors who stayed the course have been rewarded.
Think about this for a second: If you check your portfolio every single day, almost half the time, it will show a loss. Over the past 75 years, 46% of all daily returns on the S&P 500 have been negative. That’s enough to make anyone anxious. But here’s where it gets interesting.
If you extend your time horizon to one month, the percentage of negative periods drops to 39%. Over one year, negative returns happen only 26% of the time. Over five years, that number shrinks to just 15%. At ten years, markets have been positive a staggering 93% of the time. And here’s the kicker: Over a 15-year period, the S&P 500 has never delivered a negative return. Not once since World War II. Let’s take a moment to reflect on that.
The key? Stop obsessing over short-term movements. If you’re investing for retirement, your kids’ education, or long-term wealth, what happens this week or even this year shouldn’t matter.
What could you do? Resist the urge to check your portfolio daily—it only fuels anxiety. Think in decades, not days.
Pillar 2. Diversification: your portfolio’s shock absorber
Of course, holding investments for the long term only works if you can stomach the volatility. That’s where diversification comes in—it’s your portfolio’s shock absorber.
Take the technology sector, for example. The “Magnificent 7” tech stocks have taken a massive hit in 2025, shedding over USD 1.5 trillion in market value. If your portfolio was heavily concentrated in tech, you’re feeling the pain right now. But if you had a mix of stocks, bonds, and international investments, the impact would have been far less severe.
“A well-diversified portfolio reduces risk while still capturing growth. You might not always hit home runs, but you won’t strike out completely, either.”
What could you do? Review your portfolio. If you’re overly concentrated in one stock, one sector, or one country, consider rebalancing. Diversification helps you survive the downturns and thrive in the recoveries.
Pillar 3. Discipline: follow your strategy, not your emotions
Markets go up and down. That’s just reality. But if you let fear and greed dictate your decisions, your portfolio will suffer. Right now, investors are worried about tariffs, interest rates, and a potential recession. They’re wondering if they should sell and move into cash. But history shows that emotional decisions almost always lead to regret.
When stocks are soaring, people get greedy. They chase hot stocks at inflated prices. When markets crash, fear takes over. Investors panic and sell at the worst possible time. This emotional cycle destroys returns.
The best investors? They stay disciplined. They don’t try to time the market. They don’t jump from strategy to strategy. They have a plan and stick to it—no matter what the headlines say.
“Think of investing like planting a tree. You don’t dig it up and replant it every time the weather changes. You let it grow.”
What could you do? Create a simple rule: Only review your portfolio quarterly—not daily. Set clear, pre-defined rules for when and why you’d make changes. If your financial goals and risk tolerance haven’t changed, neither should your strategy.
Pillar 4. Consistency & cost efficiency: small tweaks, big impact
Investing isn’t just about picking the right assets—it’s also about how you invest. Two things make a massive difference over time: regular investing and low costs.
First, let’s talk about consistency. The smartest way to handle market ups and downs? Dollar-cost averaging—investing a fixed amount at regular intervals, no matter what the market is doing. This strategy removes emotion from the equation and ensures you buy more when prices are low and less when they’re high.
Now, let’s talk about costs. A fund with a 1.5% annual fee might not seem like much, but over 30 years, it can cost you hundreds of thousands in lost returns. Similarly, high transaction costs and hidden fees will over time be a significant drag on your returns. High fees are silent wealth killers. The less you pay in fees, the more you keep for yourself.
So what could you do? Set up automated investments like AutoInvest to remove decision-making stress. Also, check the fees you’re paying—if you’re in high-cost funds, consider switching to lower-cost alternatives.
Final thoughts: will you panic… or prosper?
The market is volatile right now. Tariffs, recession fears, and rate uncertainty are rattling investors. But long-term investing success isn’t about avoiding downturns—it’s about managing them wisely.
When the next market crash comes—and it will—ask yourself:
- Will you panic-sell at the bottom, or will you stay invested and ride the recovery?
- Will you chase hot stocks at their peak, or will you stick to your plan?
- Will you obsess over daily market moves, or will you think in decades?
The best investors aren’t the smartest or the luckiest. They’re the ones who stay in the game. The market rewards patience. It punishes impulsive decisions. Which kind of investor will you be? Fortunes aren’t made by predicting the next crash. They’re made by staying invested through all of them.