Markets are volatile, again — but is now the time to invest or sit tight? In this video, our Head of Investments Consultants, Chris Rudden, explains why staying invested often beats trying to time the market and how to confidently approach the new tax year. You can also read the full story here.
The tax year has just ended — and if you made the most of your tax-free allowances before the 5th of April, well done. But just as we wrapped up one of the key financial moments of the year, markets have reminded us that they’re on their own schedule.
Volatility has picked up — again. And naturally, many investors are wondering is this the right time to stay invested? Or to invest at all?
Let’s take a look at how the year’s shaping up so far. Markets have had a difficult start to 2025, particularly following Donald Trump’s announcement of major tariffs.
However, short-term fluctuations are part of investing. And while past performance doesn’t guarantee the future, history helps give us perspective. When we zoom out to a 5-year view, despite big bumps, markets have been resilient in the long run.
The same is more true if you widen the lens back even further – but this short window includes the Covid crises, the outbreak of the Russia and Ukraine war – which brought high levels of inflation and the big market sell off that we have seen recently.
It’s in moments like these that the old adage comes up again Time in the market beats timing the market.
It might sound repetitive, but it’s true. Staying invested has historically delivered better outcomes than trying to dodge downturns. Why? Because it’s nearly impossible to consistently get the timing right.
We have a perfect example of this recently, where certain markets moved 10% upwards in a day without much warning. Many people trying to time the markets would have been caught out by this, but those still invested definitely benefited. Missing just a handful of the market’s best days over the long term can dramatically reduce your returns. For example, missing the 15 best days between 1990 and 2018 – so 15 days in 28 years – would’ve cut your annual return from nearly 10% to just over 6%. That’s the difference between £160,000 or £58,000 on a £10,000 investment over 28 years.
And some of those best days? They happen right in the middle of periods of uncertainty — just like now.
Corrections of 5%, 10% or more happen every year. What matters is what you do in response. Emotional decisions, like pulling out at the first sign of trouble, can cause more harm than the volatility itself.
As Peter Lynch once said, “Far more money has been lost by investors preparing for corrections than in the corrections themselves.” So where do we go from here, with the new tax year now underway?
First, if you’ve made use of your allowances, great — that’s a key piece of the long-term puzzle. Now it’s about staying focused on your plan.
For long-term investors, this kind of market volatility isn’t a stop sign — it’s just another step in the journey. In fact, investing consistently through ups and downs can help average out the cost of your investments over time.
And if you’re holding cash on the sidelines, remember downturns can also present opportunities. Lower prices today may offer better value for the future — if your goals, risk appetite and time horizon allow for it.
At Moneyfarm, we build and manage portfolios that are diversified, aligned to your goals, and designed to navigate all market conditions — not just the calm ones.
So, whether you’ve just contributed to your ISA or pension, or you’re wondering how to position yourself in this new tax year, remember the key is not to panic, but to plan.
If you’d like to talk through your investments — or make sure your strategy still fits your goals — our consultants are here to help. Book a free appointment, and get that peace of mind you’re looking for.
And if you want to dive deeper into the best strategies investing and how to make the most of your tax-free allowances, you can also read our latest blogpost.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
