Recent volatility is exactly why you shouldn't be changing your long-term portfolio
14th March 2025
Markets love a narrative. Last month it was the unstoppable rise of the US tech giants driving returns, and now suddenly it’s turbulence in that same tech sector that's prompting investors to jump ship in favour of Europe's relative stability, gold's apparent safety, or even cash. If your investment time horizon is a decade or more, you should pause right now and ask yourself one simple question: why?
Market volatility is nothing new. It's an expected part of investing. Yet, whenever markets get choppy, many investors - and even some professional advisers - start tinkering with allocations, hoping to dodge short-term declines or chase short-term gains. This reactionary approach feels comforting in the moment, but history consistently shows it's usually damaging to your long-term returns.
Consider what's happening now. Following recent drops in major US tech stocks, investors are reacting predictably. Money is flowing out of previously popular investments into whatever is currently hyped - European equities, gold, or whatever else looks attractive today. But chasing short-term performance almost always means buying after prices have already risen and selling after they’ve already fallen. It’s a recipe for disappointment.
Consider what's happening now. Following recent drops in major US tech stocks, investors are reacting predictably. Money is flowing out of previously popular investments into whatever is currently hyped - European equities, gold, or whatever else looks attractive today. But chasing short-term performance almost always means buying after prices have already risen and selling after they’ve already fallen. It’s a recipe for disappointment.
This behaviour is directly at odds with what we tell investors all the time: success comes from time in the market, not timing the market. Yet, despite knowing this truth, it's remarkably difficult for many investors - and even seasoned financial professionals - to follow their own advice. When volatility strikes, there's a powerful temptation to "do something," even if the best action is to do nothing at all.
The core problem here is a lack of conviction. If a portfolio was well-designed a month ago - diversified across regions, asset classes, and styles, with your long-term goals firmly in mind - why would a few weeks of short-term price movement fundamentally change its suitability? The answer is that it wouldn't. Conviction and discipline are essential ingredients of successful investing. Changing your allocation based on a temporary market move simply undermines both.
A disciplined investment strategy doesn’t ignore market volatility - it plans for it. Good portfolio construction anticipates periods of turbulence and ensures your exposure matches your long-term goals and your true risk tolerance. True investment expertise isn't demonstrated by constantly adjusting portfolios to reflect short-term trends. It's proven by staying calm and disciplined precisely when everyone else is panicking.
Just... relax.
The core problem here is a lack of conviction. If a portfolio was well-designed a month ago - diversified across regions, asset classes, and styles, with your long-term goals firmly in mind - why would a few weeks of short-term price movement fundamentally change its suitability? The answer is that it wouldn't. Conviction and discipline are essential ingredients of successful investing. Changing your allocation based on a temporary market move simply undermines both.
A disciplined investment strategy doesn’t ignore market volatility - it plans for it. Good portfolio construction anticipates periods of turbulence and ensures your exposure matches your long-term goals and your true risk tolerance. True investment expertise isn't demonstrated by constantly adjusting portfolios to reflect short-term trends. It's proven by staying calm and disciplined precisely when everyone else is panicking.
Just... relax.
At Brigantia, we build portfolios for precisely these moments. Rather than reacting impulsively, our advice is always to revisit the fundamentals: is your portfolio still aligned with your long-term objectives? Is your risk profile unchanged? If so, the best course of action is usually no action.
Recent volatility isn't a reason to reallocate your investments - it's a reason to reaffirm your conviction in your long-term plan. Resist the urge to justify your role by making unnecessary adjustments. True expertise lies in having the discipline to stay invested through uncertainty.
If you’re finding the recent market swings unsettling, perhaps it’s time for a review - not of your investments, but of your investment mindset.
Stay disciplined, stay diversified, and stay invested for the long run.
Recent volatility isn't a reason to reallocate your investments - it's a reason to reaffirm your conviction in your long-term plan. Resist the urge to justify your role by making unnecessary adjustments. True expertise lies in having the discipline to stay invested through uncertainty.
If you’re finding the recent market swings unsettling, perhaps it’s time for a review - not of your investments, but of your investment mindset.
Stay disciplined, stay diversified, and stay invested for the long run.