Markets often  feel like they’re lurching from one crisis to the next. And lately, we’ve had  our fair share: tariff announcements, global trade tensions and inflation  concerns. Donald Trump’s upending of US trade policy and his tough talk on  China have triggered significant volatility in markets.

But here’s the  thing: the biggest down days in markets are often followed by the biggest up  days. Just look at recent history. The COVID crash was followed by a surge in  markets. The inflation spike of 2022 triggered a sell-off, yet markets have  since staged an impressive rebound. Events that felt monumental at the time –  pandemics, inflation shocks and trade disputes – inevitably pass. And when  they do, markets move on.

Last week,  China reportedly sold off a chunk of its holdings in US Treasuries, resulting  in hedge funds unwinding complex “basis trade” positions involving Treasuries  and futures. This added to the volatility. But in the background, something  else happened. Trump flinched and rolled back many of his tariffs. Because no  matter the posturing, no one wants to be responsible for market turmoil.  Markets may wobble in the short term, but rational decisions tend to prevail.

And this  brings us to the chart below. This shows how potentially costly it can be for  investors who try to ‘time the market’ by selling out when things turn  negative, hoping to buy back in when markets turn positive again.

Timing these  events is almost impossible, and history teaches us that missing the sharp  rebounds can do real damage to long-term returns. That’s why staying invested  matters.

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In the end, if and when trade deals are renegotiated and the dust settles, markets are likely to look past this episode too – just as they’ve done time and time again.

Key takeaway: History shows that staying the course through volatility is a key factor in achieving your financial goals. The biggest gains often come when they’re least expected –and missing them can cost investors dearly. That’s why we invest for the long term. Volatility can be unsettling, but patient investors weather the storm, awaiting the recovery that so often follows

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.