With the swings of the market this year having people go from euphoria to depression, it is likely that investors are itching to change their investments or strategies responsively, and perhaps they’ve already done so. But more action doesn’t always mean more returns.

How should investors react to market declines? Should they prevent losses by selling or buy more stocks at a favourable discount? Even then, when is the best time to do so?

Volatility and downturns are part and parcel of investing, and it happens more often than you think. As long as you are holding a diversified global portfolio, staying put throughout the turbulence would have given you a long-term return over 7% in SGD terms.

Volatility is back in the markets after one and a half years of relatively smooth sailing and rising asset prices. But just how common are market declines and what do they mean for annual returns?

The market will eventually pull back — while there are some indicators that allow us to gauge the probability of a correction, we suggest that the best time to prepare yourself for such an event is now.

It’s rare for annual market returns to be anywhere near its overall average. This doesn’t mean the calculations are wrong.

hat are some things NOT to do when the markets suddenly fall?

In volatile markets, whether investors end up making or losing money depends less on what the market is doing and more on how they react.