Insights

4 Things Investors Can Do in Volatile Markets

  • Current events — tightening monetary policy, the Russia-Ukraine conflict, rising interest rates, and surging inflation — have disturbed markets and rattled investor sentiment.
  • Volatile markets can cause impulsive decision-making about your portfolio.
  • There are things you can do to help hedge your portfolio, even in today’s uncertain economic environment.

Head of SPDR Americas Research

While the urge to act is natural, it’s almost never a good idea to make impulsive decisions about your portfolios. Especially now.

There are, however, four things you can do in today’s volatile environment.

1. Trust in diversification.

Now is precisely the time to get back to the basics. In other words, trust in portfolio diversification and rely on traditional risk mitigation tools to play the role they were designed to play in your portfolio.

2. Stay focused on the long term.

History has shown that time in the market — not timing the market — tends to lead to more successful outcomes over the long term. This is especially true during volatile periods that see large, outsized movements in either direction. Time is a great leveler, and swift and sizeable recoveries have historically followed steep declines.1

3. Ensure adequate liquidity.

Review the liquidity profile of your portfolio, as well as the liquidity of individual funds within it. Be sure you have sufficient liquidity should you need to trade, as the cost to do so could be high. Our SPDR teams are here to help.

4. If you must trade, do it efficiently.

If you have to trade, don’t trade using market orders within the first or last 30 minutes of the trading day, when volatility tends to be highest and spreads at their widest.

In today’s uncertain environment, focus on what you can control. And know that we are committed to helping you navigate current and future challenges.


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