After two years of unusually smooth sailing in the financial markets, February and March delivered a bit of a reality check. The US market (which drives global sentiment) declined by approximately 10% in four weeks, driven primarily by the uncertainty surrounding Donald Trump’s proposed trade tariffs and concerns about their potential impact on corporate earnings. Naturally, news headlines turned dramatic, market commentary took a decidedly negative tone, and some investors felt uneasy.
But let’s take a breath. Because in the bigger picture? This isn’t a crisis. It’s a reset.
Volatility Isn’t New — It’s Normal
The relatively smooth sailing of 2023 and 2024 was the exception, not the rule. The financial markets have historically moved in a pattern that includes regular periods of decline interspersed with longer periods of growth. Since the turn of the century, the average annual market decline has been approximately 16%. So, while the recent decline happened very quickly, what we’re experiencing now is milder than what history suggests we should expect in a typical year. The real outlier wasn’t this decline; it was the previous two years of extraordinary returns with minimal volatility. While those returns were certainly welcome, they may have created an unrealistic expectation of normal market behaviour.
Fear Grabs Headlines — But Great Companies Find Ways Around New Challenges
One concern driving the current decline is uncertainty about how new tariffs might affect corporate earnings. It’s worth remembering that throughout history, companies have consistently demonstrated remarkable adaptability. In the short term, yes, earnings reports may reflect some turbulence. But in the long run, the great companies of the world that make up your portfolio have a proven track record of innovating their way around new challenges. They adjust supply chains, develop new markets, improve efficiencies, and find ways to continue growing despite obstacles.
This adaptability is precisely why equity investments have outperformed other asset classes over time: not because they’re immune to challenges but because they repeatedly overcome them.
What Actually Builds Wealth? Discipline
The path to financial success isn’t paved with perfect market timing or selecting next year’s winning stocks. It’s built through consistent, disciplined behaviour during periods precisely like this one. Lifetime investment success comes from continuously following your financial plan. Likewise, substandard returns and even lifetime
investment failure come from reacting to current events. This principle is being tested now, and it is the perfect opportunity to demonstrate its truth.
Every market decline throughout history has eventually reversed, and successful investors understand that these temporary downturns are simply the “price of admission” for the long-term growth that often follows.
For Savers, This Is a Hidden Opportunity
For those still in the saving stage (when you’re investing every month), the current period represents genuine opportunities. Each contribution you make during down markets purchases more units of the great companies of the world at discounted prices.
This isn’t just a silver lining. It’s the engine of long-term compounding.
The Bottom Line: Stay Focused as This Too Will Pass
The financial media thrives on creating anxiety about short-term market movements. Their business model depends on keeping you glued to headlines and market updates. However, successful investors understand that daily market news is merely noise that distracts from the signal of long-term growth.
Our advice remains unchanged: ignore the short-term noise. Focus instead on the aspects of your financial life that you can control: your savings rate, your spending habits, and most importantly, your behaviour during market declines. If there’s been no change to your circumstances and goals, your financial plan should not change.
If there’s been no change to your financial plan, your portfolio should not change. While we do not know what positive or negative news awaits us in the coming weeks, we urge you to stay patient, remain disciplined, and continue behaving your way to wealth.
If you have questions about what this means for your portfolio or your financial plan, we’re here — now and always — to talk it through.
If you’re still feeling anxious after reading this article, let’s talk.
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