Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
Chief Investment Strategist
When markets get rocky, instincts often take over—and not in a good way. Volatility can trigger the kind of gut reactions that hurt portfolios more than help them. Whether it’s fear of losing money, frustration from watching gains evaporate, or the pressure to do something, investors often fall into familiar traps.
The good news? These mistakes are avoidable. Knowing what to look out for can be half the battle.
One of the most common mistakes in a downturn is bailing out at the worst possible time. Selling when prices are falling might feel like cutting losses, but more often, it locks them in.
A better approach: Instead of reacting emotionally, ask: Has the long-term thesis changed? If not, it might be a time to hold—or even buy selectively. Markets have historically rewarded patience.
Trying to sidestep volatility by timing the perfect in-and-out? That’s a slippery slope. Missing just a few of the best rebound days can have a major impact on long-term returns.
A better approach: Dollar-cost averaging during choppy periods can help reduce regret and smooth out entry points. Staying invested—rather than guessing when to jump in—often leads to better outcomes.
In risk-off mode, many investors pile into cash or low-yielding assets. While there’s nothing wrong with dialing back risk, going too conservative can mean missing the rebound when it comes.
A better approach: Think of diversification as a shock absorber. Shifting some assets to more defensive sectors (like healthcare or utilities) or dividend stocks can reduce volatility while keeping you in the game.
Volatile markets can make even seasoned investors second-guess their strategy. But changing your plan mid-storm is like redesigning a ship while sailing through a hurricane.
A better approach: If your investment plan is grounded in your goals and risk tolerance, trust it—especially when things feel shaky. Periodic rebalancing, not emotional reactions, should guide adjustments.
Market swings can tempt investors into frequent trades, hunting for quick wins or avoiding losses. But all that trading can rack up fees and tax consequences—not to mention stress.
A better approach: Sometimes the smartest move is no move at all. Focus on high-conviction ideas and long-term positioning rather than reacting to every headline or price swing.
We compiled an Investor FAQ on the market downturn last month, packed with answers to the most common concerns: Should I sell? Are we at the bottom yet? What could be the signs of a turnaround? How do I know when it’s time to buy again?
Check it out here to stay in control: Investor FAQ: Navigating the market downturn
Here’s how to stay proactive—and calm—in a volatile market:
Volatility often presents great entry points into well-diversified vehicles. Here is how you can create a watchlist on SaxoTraderGo. Also, watch this video to create dynamic watchlists on SaxoTraderGo using the screener.
Some options to consider:
Don’t wait for the perfect bottom. Invest regular amounts over time. This removes emotion and spreads your entry price—especially useful when markets are bouncing around.
Set up rebalancing alerts to flag when your allocations drift too far from target—say ±5%. This helps you trim stretched positions and add to underweights systematically.
Leverage screeners, market updates, and trade signal tools to evaluate new opportunities without chasing headlines.
Even a short note can anchor you: “I’m investing for the next 10 years, targeting long-term growth. I accept short-term dips and rebalance yearly.” It’s surprisingly effective at calming nerves.
A little perspective goes a long way. Let’s rewind to March 2020:
Of course, past performance is no guarantee—but market history consistently shows that periods of fear often pave the way for future gains.
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