Investing in turbulent times: How to react the right way

Investing in uncertain times – what you need to know

Markets are currently experiencing turbulence (as of 12 March 2025): The MSCI World index is facing its steepest decline since March 2020, the US S&P 500 recently had its worst day of the year, and the “Big Seven” tech giants lost 5.4% of their value. Among the causes are Trump's latest tariff threats, a weakening US economy, and significant uncertainty. It's understandable if this feels unsettling.

However, this downturn is primarily affecting the US market. Investors with broadly diversified portfolios (like those managed by Selma) are currently in a better position, as European markets—such as Germany, Switzerland, France, and Spain—have recorded positive performance since the beginning of the year, partially offsetting losses. Emerging markets are also showing strong recovery, and gold has recently reached new record prices.

Market fluctuations are like ocean tides—sometimes calm, sometimes stormy. The good news: By thinking long-term and investing broadly, you can stay calm and even find opportunities during turbulent times.

Our proven tips will help you make wise decisions, whether you're already investing or just getting started.

Tips for everyone who's already invested

Looking at your portfolio might feel uncomfortable right now—especially if you're heavily invested in the US market. But market fluctuations are part of investing – whether you manage your investments yourself or you're a Selma client. Crises have always existed, and history shows markets have always recovered eventually. Staying calm and sticking to your plan is key.

Here are some tips to help you stay calm and maintain your strategy:

1. Think long-term – stick to your strategy: Market fluctuations are normal, and long-term strategies pay off especially during turbulent times. Remember the Covid crisis of 2020? Markets recovered surprisingly quickly. Panic-selling is often the biggest mistake because you'll miss out on the recovery. Stay calm and trust your plan.
2. Recognise emotions, but don't let them drive your decisions: Fear and greed are poor advisors. Before acting, ask yourself: Are you reacting to facts or feelings? If in doubt, sleep on your decision to gain clarity.
3. Check your portfolio – calmly and with a plan: Reviewing your portfolio makes sense, but avoid impulsive decisions. Does your current strategy still match your goals and risk tolerance? If yes, stick with it. If not, make adjustments thoughtfully and gradually. And if you're unsure, the Selma team is always here to help you!
4. Diversify broadly – play it safe: Diversification helps reduce risks, especially in uncertain times. When one sector or region struggles, others can often balance things out. As a Selma client, diversification happens automatically: your portfolio is widely spread across countries, industries, and asset classes right from the start, helping you stay relaxed even during volatile periods.
5. Invest regularly: Regular investments help smooth out market fluctuations. Investing a large sum at once just because the market seems "cheap" can be risky. It's better to stick to your plan, invest consistently, and give your investments time to grow.

Patience and staying calm are your best allies in challenging times.

Tips for everyone who's thinking about investing now

Have you been thinking about investing but always waited for the "perfect" moment? Looking back, it’s always easy to spot the ideal time, but no one can predict what tomorrow will bring.

The truth is: there’s no perfect moment. Waiting often means missing opportunities. Is today the ideal day? Maybe – at least it seems better than last week! 😉

But what always works is having a smart strategy. With the right plan, any day is a good day to start investing. Here are some practical tips to get started:

1. Ensure financial stability first Before investing, ensure you have a solid financial cushion. We recommend holding 3-6 months’ worth of living expenses in an easily accessible account. This way, you can remain calm even when unexpected expenses arise, without touching your investments.
2. Think long-term Only invest money you won't need for at least 10 years. This reduces the risk of having to withdraw your investments during a market downturn. Since nobody can accurately predict short-term market movements, thinking long-term gives you peace of mind, even during rough patches.
3. Diversify broadly Don't put all your eggs in one basket. Spread your investments across different countries, industries, and asset classes. ETFs are a great choice, as they automatically diversify broadly and cost-efficiently, helping you manage risk and benefit from global growth.
4. Invest gradually You never know exactly when the market hits bottom or peaks. Regularly investing smaller amounts lets you benefit from the cost-average effect, balancing out purchases at lower and higher prices over the long term.
5. Automate your investments Set up automatic monthly investments to stay consistent and reduce stress. This prevents emotional decision-making and keeps you disciplined with your plan.
6. Prepare emotionally There will be days when your portfolio is down. This is perfectly normal! The key is not to panic-sell. Stick to your plan – patience pays off in the long run.
7. Questions? Just ask! Feeling uncertain or have questions? The Selma team is always here to help you start your investment journey with confidence.

Conclusion: Staying calm pays off – especially now

Turbulent times are uncomfortable but completely normal. By thinking long-term, diversifying broadly, and investing regularly, you'll navigate uncertain periods safely and confidently.