How to navigate market turbulence

Global tensions have fuelled stock market turbulence in recent days. While this can feel unsettling, it’s important to remember that market ups and downs are a normal part of investing.

While further volatility is possible in the days and weeks ahead, our research shows that staying invested tends to reward long-term investors. Market dips are inevitable, but holding your nerve and riding them out is usually the right course of action. 

Here are three things to keep in mind right now: 

1. Geopolitical sell-offs are often short lived

Global conflicts can shake markets in the short term, but history shows they tend to recover over time.

As the chart below shows, both the FTSE All World Index (global shares) and the FTSE All Share Index (UK shares) have weathered numerous major events since 1995 – including 9/11, Brexit and Russia’s invasion of Ukraine. While markets sometimes fell sharply during these periods, overall performance remained strong over the long run.

Markets have often bounced back soon after geopolitical shocks

Past performance is not a reliable indicator of future results. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

Notes: Index returns are from 1 January 1995 to 31 December 2025 and include the reinvestment of all net dividends. Returns do not include the impact of fees. Both indices were rebased so that 1 January 1995 equals 100.

Source: Vanguard, Bloomberg as at 10 February 2026.

2. Successfully timing the market is extremely difficult

Trying to avoid market dips may seem logical, but attempting to time the market can mean missing out on strong rebounds, which can seriously hamper long-term investment success.

Historically, the best and worst trading days often occur close together during periods of uncertainty. In the chart below, the gold bars, which represent the 20 worst trading days, look like mirror images of the green bars, which signify the best trading days. That proximity makes it nearly impossible to time market exits and re‑entries successfully.

The best and worst trading days happen close together

Past performance is not a reliable indicator of future results.

Notes: The chart shows daily returns of the MSCI World Price Index from 1 January 1980 to 31 December 1987 and the MSCI AC World Price Index thereafter. The green bars highlight the 20 best trading days since 1 January 1980 and the gold bars highlight the 20 worst trading days since 1 January 1980.

Source: Vanguard calculations in GBP, based on data from Refinitiv, as at 2 January 2026.

3. Don’t panic during market turmoil

Investors who sell during downturns and move to cash have historically underperformed those who stay invested. The longer they remain out of the market, the greater the likelihood – and scale – of underperformance:

• an investor who switches to cash for three months has a 61% chance of underperforming a peer who stays invested in a balanced portfolio, with an average shortfall of -1.6%

• extending that to 12 months raises the chance of underperformance to 79%, with an average gap of -9.1%

The chance of underperforming if you switch investments to cash

Past performance is not a reliable indicator of future results.

Notes: The chart shows the returns of cash versus a global 60% share/40% bond portfolio in 3-, 6- and 12-month periods after 3-month total returns of global shares were below 5%. Shares are represented by the MSCI AC World Total Return Index. Bonds are represented by the Bloomberg Global Aggregate Bond Index Sterling Hedged. Cash is represented by Sterling 3-Months Deposits, which mirrors what an individual could get in a 3-month fixed-rate savings account. Data is based on the period between 31 January 1990 and 31 December 2025.

Source: Vanguard calculations in GBP, based on data from Refinitiv, as at 31 December 2025.  

How to invest when markets are turbulent

Here are some simple steps to help you avoid overreacting to short-term downturns and position yourself for long-term success:

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Past performance is not a reliable indicator of future results.

Important information

Vanguard only gives information on products and services and does not give investment advice based on individual circumstances. If you have any questions related to your investment decision or the suitability or appropriateness for you of the product[s] described, please contact your financial adviser.

This is designed for use by, and is directed only at, persons resident in the UK.

The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information does not constitute legal, tax, or investment advice. You must not, therefore, rely on it when making any investment decisions.

Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.

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