Volatility: staying calm

Lesson 9 of 12 in our free Investing Basics guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Investing Basics is free for everyone.

Questions you'll answer

Mo's long-term investments (for 20+ years away) drop 15% in a month. Which reaction fits his plan?

Checking your investment app 40 times a day → Panic. Rent free in your head. Constant checking feeds anxiety and impulse trades.
Having a written plan for what the money is for → Calm. A plan is your anchor in a storm.
Selling after reading one scary headline → Panic. Headlines are written to grab attention, not to manage your money.
Keeping emergency cash separate from investments → Calm. So you're never forced to sell at a bad time.
Following a finfluencer's 'sell now' video → Panic. They don't know your plan — and often have their own agenda.
Fact: “Markets have historically had big falls and later recoveries.” — Historically yes — though recoveries can take years and nothing is promised.
Myth: “You can reliably time the market to sell before every drop.” — Even professionals struggle to time it. Missing the best days can hurt as much as catching the worst.
Fact: “A fall in value is only 'realised' when you sell.” — On paper it's a dip; selling turns it into an actual loss.