As markets brace for further volatility ahead of Trump’s anticipated “Liberation Day” trade tariffs, research from Fidelity International (‘Fidelity’) shows that one in three investors (33%) do not let short-term market volatility affect their investment behaviour and stick to their long-term investment strategy, while others seek advice, or look for opportunities to diversify.
Tom Stevenson, investment director, Fidelity International, commented:
“Markets are on edge amid news of potential additional trade tariffs, which have reignited concerns around global growth and disrupted investor confidence. But this is not an isolated event – it marks part of a broader shift taking place across global equity markets. After more than two years of US dominance, particularly in large-cap tech stocks, we’re now seeing a change in momentum as growth moderates in the US and improves in regions like Europe and China.
“This shift has caught many investors off guard, especially those with portfolios closely aligned to global indices like the MSCI World, which remain heavily weighted towards the US. The result is an often-unintentional concentration in a single market and sector, making investors more vulnerable when conditions change and limiting exposure to recovery and growth opportunities elsewhere.
“These developments are a timely reminder of the value of diversification and long-term discipline. Volatility is the price investors pay for higher returns over time, but it’s not the same as risk. By holding a mix of assets, maintaining a cash buffer, and continuing to invest regularly, investors can navigate short-term uncertainty while keeping their long-term objectives firmly in sight.”
Investors remain committed to long-term goals
In a recent Fidelity survey of 1,000 retail investors conducted by Opinium, the majority indicated they are not allowing short-term volatility to derail their investment approach. One in three investors (33%) said market fluctuations do not affect their behaviour, and that they remain committed to their long-term strategy regardless of short-term market movements.
Almost a quarter (23%) said they would seek advice from a financial adviser during periods of volatility, suggesting a preference for professional support rather than reacting impulsively. One in five (20%) investors said they might consider selling in response to market shifts, but would typically wait to see how events unfold before taking any action.
A similar proportion – just under one in five (19%) – said they actively look for opportunities to invest in different sectors or regions when uncertainty rises, using volatility as a chance to diversify or reposition their portfolio. Meanwhile, around one in six (16%) investors said they tend to reduce their exposure to volatile markets gradually over time, reflecting a more cautious and measured approach to risk management.
Overall, the findings suggest that investors are becoming more disciplined in how they respond to market uncertainty. While many stay the course, others seek professional insight or adapt their strategy with care – highlighting a growing awareness of the benefits of long-term thinking.
Top tips for navigating market volatility
Tom Stevenson shared four key strategies for investors:
1. Stay calm, carry on
“It may sound counterintuitive but staying invested throughout times of volatility is the best strategy. When markets hit rocky waters, jumping in and out should be avoided, otherwise you run the risk of missing out on unexpected opportunities that might arise from market corrections.
“Regardless of how experienced one is as an investor, it is incredibly difficult to predict how the market is going to behave. Therefore, timing the market is a bad idea and you are more likely to get it wrong than you are right. Taking a long-term approach and remaining invested in spite of highs or lows is more likely to get you the outcome you want.”
2. Diversification is a no-brainer
“Diversification is key in making sure that you are spreading your risk, as the likelihood that all assets will crash at the same time is slim to none. Having a mix of assets, from shares and funds to bonds and cash, across different sectors and geographies is a good way to make sure that your portfolio is volatility proofed.”
3. Market corrections can create attractive opportunities
“Sometimes amid the storm, a glimpse of opportunity can emerge and it is important to keep your eyes open and be positioned to take advantage of this. Although this a somewhat contrarian approach, buying shares in a company or a fund that is heading south could be worth taking. In other words, volatility can be your best friend.”
4. Don’t be swayed by sweeping sentiment
“Following the herd can actually work against you. Just like trends in fashion and music, investment themes can also fall in and out of favour. For example, emerging markets and natural resources were ‘hot’ investment areas from 2003 to 2007, but investors should be advised to take a discriminating view and not just a top-down passive approach for diverse areas like emerging markets. In other words, don’t let your judgement get clouded by the euphoria of the market, and make sure you remain inquisitive about market trends instead of jumping on the bandwagon.”
Further information on volatility and investing in uncertain times from Fidelity’s Insights team can be found here.
