Weekly Buzz: How to keep your cool when markets don’t

Markets have had a bumpy month. If your gut reaction has been to check your portfolio more often, or avoid looking at it altogether, that's a natural response. What matters more is your long-term investing strategy. A recent Capital Group piece on handling market declines lays out some useful data worth sitting with.

What does history tell us?

• Declines are a natural part of market behaviour: Historically, the S&P 500 has dropped 10% or more roughly once every 18 months. Bear markets, or declines greater than 20%, have occurred about every six years. None lasted forever. Each was followed by a recovery and, eventually, a new high.

• Time in the market beats timing the market: You’ve heard this one before. No one can consistently call short-term market moves, and the cost of trying is steep. If you’d invested $10,000 in the S&P 500 in 2016, it would have grown to about $33,500 by the end of last year. If you’d missed just the ten best trading days over that period? You’d be left with around $17,450, or about half as much.
  
  
• Diversification is your shock absorber: A diversified portfolio won't give you the highest high of any single asset, but it also won't hit you with the full force of the worst performer. One year, emerging markets might run ahead, while the next might see US stocks take the lead. There’s no consistent winner, which is why you want exposure across all of them.

What’s the takeaway?

Here’s one last piece of data worth remembering: over every rolling ten-year period from 1939 to 2025, the S&P 500 delivered an average annual return of about 11%. That includes every crash, correction, and crisis along the way. Volatility is uncomfortable, but it’s also temporary. As always, stay informed and stay invested.

(For a portfolio that’s built with a range of market conditions in mind, see General Investing.)

In Other News: Markets rally on the US-Iran ceasefire

After five weeks of conflict that closed the Strait of Hormuz and sent oil prices surging nearly 70%, the US and Iran have agreed to a two-week ceasefire. Pakistan brokered the deal hours before Trump's deadline to launch strikes on Iranian infrastructure. Iran signalled its willingness to reopen the Strait while both sides head to Islamabad for formal talks.

S&P 500 futures jumped about 2.5% on the news, while oil dropped around 17% to below $95 a barrel. The Strait handles roughly a fifth of global oil supply, so a full reopening would take the worst-case energy shock scenario off the table. Lower oil feeds directly into inflation expectations, loosening pressure on central banks to keep interest rates elevated.

A two-week ceasefire isn't a full resolution, however, and the truce is already being tested: reports suggest Iran may have reversed course on opening the Strait following Israel’s continued strikes on Lebanon. Still, there is some positive momentum, and the market's reaction reflects that. With news cycles this quick, the investors who come out ahead are rarely the ones who reacted to every headline.

These articles were written in collaboration with Finimize.