Navigating sharp market swings
During turbulent times, how you’ve prepared clients and what you do next is of utmost importance.
What's happening
Keeping perspective on market risk amid the Iran conflict
Recent tensions in Iran and the broader Middle East have rattled global markets. Equities and bonds have come under pressure, and oil prices have spiked as investors assess risks of supply disruptions and regional spillover.
However, current market reactions likely reflect a repricing of near‑term risks rather than a shift in the long‑term economic outlook. These market shifts shouldn’t derail investment plans.
Historically, geopolitical shocks rarely alter long-term market direction unless they lead to sustained energy shortages, tighter financial conditions, or a broad economic downturn. Absent those outcomes, markets typically recalibrate as scenarios become clearer and extreme outcomes fail to materialize.
Periods like these highlight the need for resilient portfolios aligned with an investor’s goals, time horizon, and comfort with risk. Diversification, discipline, and a long‑term perspective remain essential anchors when uncertainty rises.
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
Vanguard Perspective
The scale and persistence of energy disruptions raise noteworthy risks for growth, inflation, and central bank decision-making. But more for the euro area and Japan and less for the United States.
Expert Perspective
Vanguard’s Matt Wrzesniewsky explains how fixed income fundamentals and disciplined security selection can help advisors navigate market volatility and growing macro uncertainty.
Vanguard Perspective
Geopolitical shocks unsettle markets, but history shows long-term outcomes can be resilient.
Expert Perspective
Equities kept climbing in the fourth quarter, extending a 3-year bull market while investors continued rebalancing.
Vanguard Perspective
Our 2026 economic and market outlook provides expert insights into 2026 and what lies ahead in light of AI investment and other headwinds.
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.
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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.