Your guide to stock market volatility

When the market goes down, it causes concern—we get it. Equipping yourself with knowledge about market volatility can help you make better decisions during uncertain times.

What is market volatility?

Market volatility refers to fluctuations in the price of investments. In times of economic stress, markets tend to be more volatile, and you might see some big ups and downs.

Selling investments during times of market volatility is likely to do more harm than good because you could be locking in losses—and derailing your financial plans.

Making decisions in the heat of the moment rarely goes well. Instead, figure out your approach to market volatility—and stick to it.

Our advice on what to do

The stock market goes up on average, over time. We believe that disciplined strategic investing is the best way to build wealth in the long run. An investor who focuses on timing the market has the greatest potential for losses. However, if you’re still worried, there are still some actions you can take.

 

1. Do nothing. The act of staying put is often the best thing an investor can do. There is evidence that panic-induced account changes and account monitoring can end up hurting your goals.

2. Tweak your risk level. But keep in mind that changing your allocation may cause taxes.

3. Temporarily divert your deposits. Explore options like our low-risk cash account, Cash Reserve.

A woman in a standing yoga pose next to a stack of balanced rocks with a coin atop with the Betterment logo.

Learn more Expert insights on volatile times.

Additional reading:

Let's ride out this rollercoaster together.

Get started