You have likely seen news about President Trump and the tariffs he introduced on countries around the globe. These tariffs are a tax on goods imported to the US and could mean that the cost of products from overseas rises. The US government hopes this will push consumers to buy American products instead.

Unfortunately, the policy will likely affect any global businesses that sell products to the US. As a result, many countries have tried to protect their interests by introducing tariffs of their own.

All this disruption and potential damage to the economy caused stock markets to react poorly, and you might have seen the value of your investments fall as a result.

While President Trump recently agreed a tentative trade deal with the UK, the situation is still unfolding, and the global economy will likely feel the effects of tariffs in the future.

As such, this current period of market volatility will probably continue, and you may be concerned about what this means for your wealth. It’s also important to note that markets have always shifted in response to global events so you may experience similar situations in the future.

As you navigate the turbulence, you may want to avoid these three mistakes that investors make in volatile markets.

1. Panic-selling

It’s only natural to be worried when you read news about stock market turmoil every day and see the value of your own portfolio falling. Your instinct might be to find ways to prevent further losses if you can.

Selling your investments could be one way to achieve this. However, cashing out may not be the most sensible option because, in the past, market volatility has only lasted for a relatively short period of time.

Throughout history, there have been many significant global events, including the Covid-19 pandemic, the 2008 financial crisis, the Dot Com bubble, and the Wall Street Crash, which caused stock markets to fall.

The good news is the markets eventually bounced back and continued rising. This means that, while past performance doesn’t guarantee future returns, the value of your investments could grow in the long term, despite short-term periods of disruption.

If you make the mistake of panic-selling during a market crash, you lock those losses in and wouldn’t benefit from future returns if and when the markets recover.

In comparison, if you simply held your investments, it’s likely that you would eventually recoup your losses and achieve more growth.

2. Moving to cash because it’s a “safer” option

Investors that are prone to panic-selling might decide to move their wealth to a cash savings account instead. You might find this option attractive because cash seems “safer”.

After all, you may generate regular interest on your savings and won’t be affected by volatility in the same way you would if you invested in the stock market.

Despite this, moving to cash could be a mistake. While you may not adopt as much risk as you would when investing, it could also be far more difficult to achieve the growth you need to reach your financial goals.

Research reported by Which? shows that wealth invested in stocks grew faster than inflation in every 20-year period between 1926 and 2022.

In comparison, cash only outpaced inflation in 66% of the 20-year periods.

Consequently, if you move your wealth to cash and leave it there, you might struggle to achieve inflation-beating growth. Eventually, this could mean you have to make sacrifices to your lifestyle because you haven’t built the necessary wealth to fund your dream retirement.

Yet, if you remain invested instead of moving to cash, you may be able to weather the periods of volatility and expand your wealth in the long term.

3. Attempting to “time the market”

Some investors make the mistake of thinking that a market downturn is an opportunity to maximise their returns. The belief is that if you can “time the market” and invest heavily when prices reach their bottom, you’ll make significant gains when the market bounces back.

While this strategy could work, you’re reliant on a lot of luck. As recent events demonstrated, the markets are very unpredictable and a single announcement from a world leader or business could influence prices in a major way.

As such, it’s likely impossible to accurately predict what markets will do. So, you might invest a large sum when you believe markets are about to bounce back, only to find that they continue falling and you make significant losses.

Also, if you’re not investing regularly because you’re waiting for the “right” time, you could miss out on many opportunities to contribute and grow your portfolio.

Instead of trying to time the market, it may be more sensible to sustain your current investment strategy and make regular contributions. This means you can continue building wealth in your portfolio and when the volatility passes, you may see increased growth.

Making regular contributions also means you purchase shares when prices are lower in some months and higher in others. This may smooth out price fluctuations and potentially dampen the effects of volatility.

If you can avoid these common mistakes, your portfolio may be more likely to withstand market movements and recover in the future.

Get in touch

We can manage your portfolio and help you achieve the growth you need, despite any short-term turbulence.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.