Feeling Nervous About the Market? Here’s What You Need to Know
William Barreca - Mar 18, 2025
Feeling anxious about market swings lately? Concerned about how tariffs and politics might shake things up? If you're sitting on cash, wondering if now's the wrong time to invest—or even thinking about pulling everything into cash—let's take a deep breath.
Here are some insights to help put things into perspective:
1. Short-term volatility is normal
From 1979-2023, the US stock market had an intrayear decline of at least 10% in 25 out of the 45 years. In 17 of those 25, the index ended up on the year.
Investors who stayed in the market earned an average annual return of 13.2% during that time.
[i]
No one likes it. Everyone would love that magical investment with great returns and no volatility.
But that doesn’t exist. Volatility is price you pay for the higher-expected long-term returns you get from owning stocks instead of GICs/cash.
[ii]
2. You can always find a reason to be scared of the markets
Today, people are nervous about Trump, tariffs and trade wars.
They’re understandably worried what this will mean for markets going forward.
Some perspective:
If in 1997, I'd told you that over the next 25 years, we'd experience:
- Asian contagion
- Tech collapse
- 9/11
- Multiple wars (Iraq, Afghanistan, Russia etc.)
- The biggest financial crisis since the Great Depression
- A global pandemic
- The original Trump trade war with China in 2018-2019
You probably wouldn't have wanted to invest in stocks.
Yet, from January 1997-December 2021, the US stock market averaged a 9.8% annual return. [iii]
3. The cost of waiting things out
I understand the worries of putting money into the markets during uncertain times.
But to my previous point, you can literally always find a reason to be uncertain about the markets.
And you only earn market returns by staying invested. You never know the days the markets will do great. And the cost of missing those days is really high.
[iv]
4. The markets aren't even doing that badly
By listening to the news, it might feel like the markets are in a free fall.
Based on the narratives, it would be hard to believe that Canadian, International Developed & Emerging Market stocks are all POSITIVE in 2025. The S&P 500 is down less than 5%.
If you have an allocation to bonds, then they’re doing they’re job and helping to hedge out volatility.
Hardly a freefall.
[v]
2023 and 2024 were both abnormally good years for the stock market. And although there was volatility during that time (remember the Silicon Valley Bank crash?), it’s understandable to have forgotten how common volatility is in the stock market.
Some days the stock market will go up. Some days it will go down.
You can’t control the stock market, but you can control your own behaviour. You have to stick to your plan through the good and the bad.
The views and opinions expressed in this article may not necessarily reflect those of IPC Securities Corporation.
[i] https://www.dimensional.com/ca-en/insights/ignoring-the-bumps
[ii] https://www.chrishutchins.com/ben-carlson-money-lessons/
[iii] https://www.dimensional.com/ca-en/insights/worried-about-stocks-why-long-term-investing-is-crucial
[iv] https://my.dimensional.com/one-pagers/the-cost-of-trying-to-time-the-market