When World Events Rock the Stock Market

When World Events Rock the Stock Market


It’s a crazy world out there, and it all seems to be happening in real time. Four decades after CNN brought us 24-hour news, we now carry an endless supply of news and information in our pockets. We can see world events unfolding before our eyes, and watch moment-by-moment as they impact the economy and the stock market. Now ‘doomscrolling’ is part of our lexicon and it’s become harder and harder to look away from all that’s going on.

It’s perfectly rational to worry about your investment portfolio when there’s so much uncertainty. Events in the world can cause stocks to rise and fall, and the market can experience sudden dips, drops, or adjustments that result in concerning short-term losses in your investments. This can be gut-wrenching, and you may wonder if there’s anything you can or should be doing about it.

Hang on – we’ve been here before

Of course you always want your investments to be heading in a positive direction. But if you want the kind of growth that a portfolio of stocks can give you over the long run, that comes with a certain amount of ups and downs. Unfortunately, when some people see the stock market dropping over multiple consecutive days, they want to move their money to a ‘safer’ location until the market recovers. This is usually an unwise decision.

The problem is, nobody can really predict what the stock market is going to do in the short term. When fearful investors sell stocks as they’re going down, they usually have a hard time knowing when it’s best to buy back into the market. This can mean missing out on a market recovery while a portfolio is sitting on the sidelines. On top of that, liquidating a taxable portfolio can result in capital gains taxes – so it could cost you real money.

It’s human to want to take action when the world is rocked with unsettling news. When it comes to your investment portfolio, however, decades of evidence shows that steady discipline will provide the best results. If you’re investing for the long term, some basic rules apply: Build a diversified portfolio, stick with it, and rebalance as needed.

It’s okay to feel what you’re feeling

One thing you might want to do when the stock market is experiencing volatility is to check in with your own feelings. If you feel like your portfolio is well structured and you have enough information to know what to expect, then you should probably hang in there and trust that you’re doing the right thing. On the other hand, if you’re losing sleep or feeling sick to your stomach, it may be time to talk to your financial planner.

Now, it’s more than likely that your financial planner will discourage you from making sudden changes to your portfolio, but they’ll want to make sure you’re well informed about what to expect. And if necessary, they can help you rebalance your portfolio to make sure it suits your current needs and risk tolerance. Keep in mind that your needs will change over time as your financial situation changes and as you get closer to retirement. Some investors interpret ‘hold steady’ as advice to do nothing. While it’s usually a bad idea to make sudden moves, that doesn’t mean completely ignoring your portfolio. Annual reviews of your financial plan will keep you on course.

Your Arrivity financial planner is your fiduciary partner, which means their job is to look out for your financial needs. If the news of the world is making you feel uncertain about your investments, it may be time to give them a call.

Please contact us at 206.217.2583 or

if we can assist you or someone you know with financial planning.

Please contact us at 206.217.2583 or info@arrivity.com if we can assist you or someone you know with financial planning.

Liz is a Late Boomer in the sandwich generation who started an independent writing and brand consulting practice after years as a senior marketing executive. She lives in Seattle, Washington. Her mother lives nearby and her daughter comes home during college breaks.

The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.