In his best-selling book, The Hitchhiker’s Guide to the Galaxy, Douglas Adams described the interstellar travel guide as having the words “don’t panic” written on the cover in “large friendly letters”. It’s good advice – and never more so than right now. Especially if you’re an investor who’s worried about the fact that the market is particularly unpredictable right now.

Changes in world-leadership, consumer boycotts, the ongoing fallout from the Budget, continued unrest in Ukraine… there are many contributing factors to the current state of the markets. Chances are new factors could be influencing things by the time you read this article. But whatever the cause, the fact of the matter is that the markets look a little alarming right now. And while we’re not about to tell you to totally ignore the news and pretend it’s not happening (tempting though that is!) we do suggest that you take a pragmatic approach and not panicking.

We’ve put together a brief list of things to remember during challenging times, we hope it provides some reassurance and helps put things into perspective. Remember, if you’d like to talk in detail, I’m here to help.

Been there, done that

There’s a theory that the market crashes every seven to eight years (or once a decade, depending on your source) and while that might be an oversimplification, it’s important to remember that the market does crash from time to time. It also recovers every time.

It might not feel particularly comforting right now, but it’s important to remember this – take a look at the chart below and you’ll see what we mean. You can see that over the past 50 or so years, we’ve been through a number of significant events and yet markets have still risen.

This shows that whatever happens, whether it’s Watergate, The Gulf War, or Russia invading Ukraine, long-term, things will adjust; it’s all about riding out the storm and focusing on the road ahead.

Don’t feed your anxiety

Let’s be honest, reading or watching the news right now isn’t terribly reassuring. And while embarking on a news blackout is tempting, it’s probably not the answer either. That said, avoiding the more sensational headlines can’t hurt.

The same goes for constantly checking on your investments and reading the financial pages. Don’t! It’s good to be aware and informed, it’s not so good to keep refreshing stock price webpages in the hopes that things will have improved since you last looked. Spoiler – they probably haven’t, and there’s not a lot you can do to change that right now. What you can do is keep coming back to the plan – it’s the one thing we can control. Please get in touch if you’d like a refresh of this.

Don’t make rash decisions

Panicking and reacting to danger of course seems logical – as humans we’re hardwired to do this in order to survive. But if we think about this in terms of investing, we can see it’s counterintuitive..

Back in 1978, Ronald Wayne signed on as the third founder of Apple (yes, THAT Apple), earning himself a ten percent share of the emerging tech company. The problem was that Ronald was quite risk averse (in fairness at that stage he was the only founder with tangible assets that might be at risk if things went awry) and less than a fortnight after joining Jobs and Wozniak, Ronald had his name removed from the contract and sold his shares back to the other co-founders for $800.

Had Ronald stuck with Apple and retained his 10%, his stake would be worth billions of dollars today. And while most of us are unlikely to lose a billion (let alone several) Ronald’s story is a pretty powerful cautionary tale about letting short-term panic win over long-term goals.

Remember Covid? This could well serve as a similar example of a time when lots of people panicked and reacted by withdrawing from the market. But as the chart below shows, it’s time in the market (not timing the market) that counts. You can see how those who held their nerve and remained invested (via the green line) won out in the long-term over those who left the market and reinvested after three months (the dark blue line) and those who exited the market and invested their money in cash (the grey line).

Keep calm and do nothing

You’ve probably noticed a theme running through this article, which boils down to the old tea towel favourite “keep calm and carry on”.

The best thing to do right now, counterintuitive as it might be, is to sit tight, and do nothing. Don’t let worry get the better of you. Take a deep breath and remember it’s all happened before.

It's scary and counter intuitive, but it’s the best course of action. And we’re here to help you through this uncertainty. This is all part and parcel of investing – things will change for the better, just hang in there!

Please note: the value of pensions and investments and the income they produce can go down as well as up and you may not get back the full amount that you originally invested.

The content in this article was correct on 18 March 2025

Why good investors keep calm and carry on as usual