6 tips to navigate volatile markets

When markets get choppy, it pays to have an investing plan and to stick to it.

1. Keep perspective: Downturns are normal

  • On average over the past 150 years, US stocks have dipped into bear market territory about every 6 years, with median losses of 33%.1
  • But while market downturns may be unsettling, history shows stocks have recovered and delivered long-term gains.

Despite market pullbacks, stocks have risen over the long term

Source: Fidelity Investments. Past performance is no guarantee of future results. See footnote 2 for details.

2. Get a plan you can live with – through market ups and downs

  • Your mix of stocks, bonds, and short-term investments will determine your potential returns, but also the likely swings in your portfolio.
  • Pick an investment mix that aligns with your goals, timeframe, and financial situation, and you can stick with despite market volatility.

Choose an investment mix you are comfortable with

Data source: Fidelity Investments and Morningstar Inc. 2021 (1926–2021).3 Past performance is no guarantee of future results. Returns include the reinvestment of dividends and other earnings. This chart is for illustrative purposes only. It is not possible to invest directly in an index. Time periods for best and worst returns are based on calendar year. For information on the indexes used to construct this table see Data Source in the notes below. The purpose of the target asset mixes is to show how target asset mixes may be created with different risk and return characteristics to help meet a participant's goals. You should choose your own investments based on your particular objectives and situation. Remember, you may change how your account is invested. Be sure to review your decisions periodically to make sure they are still consistent with your goals. You should also consider any investments you may have outside the plan when making your investment choices.

3. Focus on time in the market – not trying to time the market

  • It can be tempting to try to sell out of stocks to avoid downturns, but it’s hard to time it right.
  • If you sell and are still on the sidelines during a recovery, it can be difficult to catch up. Missing even a few of the best days in the market can significantly undermine your performance.

Missing out on best days can be costly

Hypothetical growth of $10,000 invested in the S&P 500 Index

January 1, 1980–June 30, 2022

Past performance is no guarantee of future results. Source: FMRCo, Asset Allocation Research Team, as of June 30, 2022. See footnote 4 for details.

4. Invest consistently, even in bad times

  • Some of the best times to buy stocks have been when things seemed the worst.
  • Consistent investing can give you the discipline to buy stocks when they are at their cheapest.
  • Consider setting a plan for automatic investments.

Investing during recessions has historically led to strong investment results

For illustrative purposes only. Recession dates from the National Bureau of Economic Research (NBER). Past performance is no guarantee of future results. It is not possible to invest directly in an index. All indexes are unmanaged. See footnote 4 for index information. S&P 500 index monthly total returns from 12/31/49 to 12/31/19. Source: Bloomberg Finance, L.P.

5. Get help to make the most of a down market

  • While no one likes to lose money, your financial advisor may be able to help you take advantage of a down market.
  • Tax rules may let you use losses on some of your investments to reduce your future tax bills, or use lower share prices to convert to a Roth IRA at a lower tax cost. 
  • Down markets may also be a good time to meet with your advisor to discuss adjusting your investment mix, or taking advantage of opportunities when prices are low.

6. Consider a hands-off approach

  • If you are not comfortable with market risk, consider turning your portfolio over to a professional through a managed account or all-in-1 mutual fund.
  • If you don't have a strategy, or think yours may be off track, start planning now with our online tools. Or schedule an appointment with a Fidelity representative. We can help.

Next steps to consider

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