Investing in financial markets is never without risk, but periods of uncertainty, elevated valuations, and heightened volatility – such as we’ve seen in recent weeks – present unique challenges for investors. Amidst these types of conditions, it’s important to maintain a disciplined approach to navigate short-term turbulent markets and keep your plan on track for long-term success.

Strategies for Navigating Uncertain Markets

April’s tariff developments – coupled with extremely high stock valuations overdue for a correction – have had a significant impact on the markets. Trade negotiations and tariff updates will likely continue to unfold for the next several weeks and months, which may introduce further market volatility.

With economic conditions expected to remain unpredictable in the near term, here are some investment strategies and principles that can help you manage risk during volatile times.

1. Diversification and Asset Allocation
   A well-diversified portfolio helps reduce risk by spreading investments across asset classes, industries and geographies. In volatile markets, maintaining an appropriate asset allocation based on your risk tolerance and investment goals can help provide stability.
   
   For example, since the beginning of 2025, safe haven assets such as high-quality bonds, gold and cash have preserved capital even as U.S. stocks – particularly growth stocks – have posted negative returns. Value stocks, international stocks and dividend payers are also performing well relative to growth stocks. This illustrates how proper diversification can make a difference for a portfolio.
    
2. Focus on Quality Investments
   Companies with strong balance sheets, consistent cash flow, and durable competitive advantages tend to perform better during periods of uncertainty.
    
3. Adopt a Long-Term Perspective
   While short-term market volatility can be unsettling, long-term success depends on patience and discipline. Staying focused on your goals can help you avoid impulsive decisions.
    
4. Maintain Liquidity and Manage Risk
   Holding some cash or cash-equivalents can provide flexibility during turbulent times. Additionally, employing risk management in the form of portfolio asset allocation can help protect capital in uncertain markets.
    
5. Utilize Dollar-Cost Averaging
   Investing systematically through dollar-cost averaging—purchasing investments at regular intervals—can reduce the impact of market volatility and take emotion out of the decision-making process.
    
6. Monitor Macroeconomic Indicators and Stay Informed 
   Keeping an eye on key economic indicators, such as interest rates, inflation trends and corporate earnings, can help you make informed decisions. Understanding these factors can provide valuable context for adjusting your investment strategies as needed.

Final Thoughts

Investing during times of uncertainty and volatility requires a disciplined approach, careful risk management, and a commitment to your long-term financial goals. While market fluctuations can be unnerving, they may also present opportunities for patient and strategic investors. By diversifying your portfolio, focusing on quality investments, and maintaining a long-term perspective, you can navigate challenging market conditions with confidence and resilience.