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Close Look: The power of staying invested in volatile markets

The power of staying invested in volatile markets 

The first half of 2025 has seen its fair share of market volatility. Investors have had to deal with big swings in prices across major stock markets. Despite this, we believe investors should not panic and instead remain invested.

What has happened?

Investors’ expectations of the markets, and the impact on their portfolios, are influenced by a range of factors. These include economic conditions, geopolitical events and newsflow. This year has seen a good deal of upheaval, including the US government announcing a range of tariffs on various countries and continued uncertainty regarding conflicts in the Middle East. Investor sentiment has swung in line with all these developments, which has led to significant price swings, or volatility, on the markets.

Volatility is normal 

While it might be tempting for investors to react and move their money when markets are volatile, it is important to remember that volatility is not new. Stock markets regularly go through bouts of volatility, but over the longer term, they tend to rise. Withdrawing money after a correction is a guaranteed way to lock in losses. As the graphic shows, it can mean missing out on any potential market rebound, as historically some of the best days for the stock markets have occurred during periods of extreme volatility. It is said that ‘time in the market is better than timing the market’, and as long-term investors we believe this is true.

The power of staying invested

Value of hypothetical $1,000 investment (2015-2024)

Source: Capital Group, RIMES, MSCI, as at 31 December 2024. Value assumes $1,000 investment on 1 January 2015 into MSCI ACWI, with net dividends reinvested. These scenarios are presented as of this document’s date. They do not constitute a representation or guarantee as to future scenarios nor performances. AXA Investment Managers disclaims any and all liability relating to these scenarios’ description and can modify these scenarios according to market evolutions and taking into account the regulations in force.

AXA IM Select view

We have continued to increase our exposure to global equities, in light of what we believe to be market-friendly announcements. As for fixed income, we prefer investment grade and global high-yield bonds, as we believe default rates for corporate debt will remain low.

Source: AXA IM, as of 8 September 2025

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