Navigating sharp market swings
During turbulent times, how you’ve prepared clients and what you do next is of utmost importance.
What's happening
Trade uncertainty and growth risks—are we at an economic crossroads?
Recent tariff-related moves in financial markets are a strong reminder that the issue of global trade isn’t behind us. Details related to trade can shift quickly. As global trade reorganizes itself, we should expect continued negotiations and related uncertainty.
Although the pass-through of tariffs to consumer prices has been more muted than initially expected, some of that is likely because the trading ecosystem is still evolving in a rapidly changing global economy. Reactions can occur in all types of markets, including equity, fixed income, currency, commodities, and beyond, and can reverse themselves quickly.
More broadly, the global economy appears at a crossroads. One scenario envisions emerging long-term trends such as AI driving productivity gains, while the other considers fiscal deficits and aging populations weighing on growth.
As these dynamics play out, resilient portfolios based on an individual’s goals, time horizon, and comfort with risk are as relevant as ever.
Staying the course is not “set and forget”
While it’s understandable that some clients may to want to sell their portfolio holdings during market volatility, it’s imperative to guide them in these moments. Make sure they understand the benefits of staying invested, revisiting asset allocation, and not timing the market.
What steps to take
3 steps to help clients endure market volatility
Market volatility is nothing new. How you’ve prepared clients and what you do next are of paramount importance. Now is the time to lean into discipline and help guide your clients to continued investing success.
Use the Market Hindsight Tool
Give your clients a simulated snapshot of historical market events and the potential impact on their portfolios. This realistic glimpse demonstrates the true value of staying invested, especially during turbulent financial markets.
More insights
Expert Perspective
Vanguard’s Sara Devereux says bond investors are in a rare sweet spot—strong yields, low risk, and big potential.
Expert Perspective
Vanguard’s head of fixed income discusses market volatility, inflation, and the role of bonds in portfolios.
Podcast Episode
Joe Davis, Vanguard’s global chief economist and head of the Investment Strategy Group, recently joined The Compound and Friends podcast to share a forward-looking perspective on the forces shaping the global economy and investment landscape. Drawing from his latest research and new book, Coming Into View, Joe outlined a data-driven framework for understanding the next decade’s defining economic themes.
Expert Perspective
Financial advisors added measurable value during Q2 2025’s extreme market volatility. Learn how the Advisor’s Alpha® framework and Vanguard’s 3B mental model (Business, Biology, Behaviors) helped clients navigate uncertainty, avoid emotional decisions, and stay focused on long-term goals.
Vanguard Perspective
Uncertainty creates opportunity and bond ETFs have proven effective at finding liquidity in periods of uncertainty.
Disclosures and footnotes
Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer's ability to make such payments will cause the price of that bond to decline.
Vanguard Personalized Indexing Management, LLC ("Vanguard Personalized Indexing Management"), formerly Just Invest, LLC, an SEC-registered investment advisor, is an independently operated wholly-owned subsidiary of The Vanguard Group, Inc. ("Vanguard"). Vanguard Personalized Indexing is an asset management technology that has been developed and is offered solely by Vanguard Personalized Indexing Management.
For more information on Vanguard Personalized Indexing Management and Vanguard Personalized Indexing, and to access Vanguard Personalized Indexing Management's Form CRS and Form ADV Part 2A disclosure brochure, please visit Vanguard Personalized Indexing page.
All investing is subject to risk, including possible loss of principal. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Diversification does not ensure a profit or protect against a loss.
The information contained herein does not constitute tax advice and cannot be used by any person to avoid tax penalties that may be imposed under the Internal Revenue Code. Each person should consult an independent tax advisor about their individual situation before investing in any security.
Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs than the original investment and could introduce portfolio tracking error into your accounts. There may also be unintended tax implications. Prospective investors should consult with their tax or legal advisor prior to engaging in any tax-loss harvesting strategy. Neither Vanguard Personalized Indexing Management nor Vanguard provide tax or legal advice.
All investing is subject to risk, including possible loss of principal. Be aware that fluctuations in the financial markets a nd other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility. It is possible that tax-managed funds will not meet their objective of being tax-efficient.