Don’t Let Selloffs Derail Your Plan: Why Selling Low Backfires
With recent market turbulence tied to renewed tariffs, many investors feel the urge to hit the eject button. Before you do, it helps to understand how selloffs, rebounds, and timing really work—so you can make calmer, smarter choices.
Why bailing out can be costly
Big swings tempt investors to “get out until things settle.” The problem: markets often stage some of their strongest up days right after the worst down days. If you exit during the slide, you risk missing those crucial recoveries—and that gap compounds over time.
The price of missing the rebound
Research by JPMorgan Asset Management shows that several of the market’s best daily gains arrive near the worst ones. Over the last two decades, seven of the ten best days happened within two weeks of the ten worst days. During the March 2020 downturn, the market’s second-worst day was followed immediately by its second-best day.
Here’s what that looks like in dollars:
Invest $10,000 in the S&P 500 on January 3, 2005, leave it untouched through December 31, 2024 → roughly $71,750 (10.4% annualized).
Miss just the 10 best days in that span → about $32,871 (6.1% annualized).
Miss the 60 best days → only $4,712, less than half of the original investment.
The takeaway is clear: stepping aside during downturns can dramatically limit long-term growth.
Perspective beats panic
Sharp declines trigger emotional reactions that push investors toward “safety.” Yet markets have weathered wars, disasters, banking crises, and pandemics—and still gone on to set new highs over time. Keeping a long view makes the day-to-day noise easier to handle and helps you stick with a plan designed for many years, not a few headlines.
How to navigate volatility without flinching
Stay diversified. Different asset classes and sectors respond differently to tariff news and policy shifts—balance spreads risk.
Avoid knee-jerk trades. Rapid in-and-out moves try to dodge pain but often miss the bounce. Adjust only when your long-term plan (or life situation) truly changes.
Focus on the marathon. Successful investing depends more on time in the market than timing the market.
Stay the course with FMD Wealth Advisors
At FMD Wealth Advisors, we build portfolios and plans that anticipate rough patches—so you don’t have to react to every headline. If market volatility has you second-guessing your allocation, we’ll help you stress-test your strategy and keep you on track. Book your Free - Assessment Call here.
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