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7 Tips to Stay Calm, Even When There’s Market Uncertainty

Written: 27 May 2022

Author: Kirsty O'Hara

7 min read

Navigating market volatility can be a challenging task for any investor. When considering how to invest confidently, during times of market volatility - we suggest you honestly ask: Do I have the right personality to hold these types of investments?

If you know that when markets ‘dip’ you’re going to want to sell up or switch funds - then there is absolutely nothing wrong with acknowledging that early on, when establishing your investment strategy.

George Carter from Nikko Asset Management comments that:

“Before starting out on your investment or KiwiSaver journey, it’s important to consider what your psychological or behavioural responses would be to movements in prices and the value of your investments – not just when they’re going up and increasing your wealth, but especially when they’re falling and you’re suddenly confronted by a disappearing asset balance.”

Regardless of your investing experience, you need to know you can hold steady when others around you may be exiting markets. Whether we like it or not, we are herd creatures, and therefore easily tempted by herd behaviour.

In this article we share:

Common investing terms.

There are key themes and industry terms you’ll hear thrown around, that relate to uncertain economic environments. Understanding these may help them to feel less scary.

7 Key Questions you can ask yourself

These are questions to keep your emotions in check, and inform your own investment strategies. We all have a monkey on our shoulder from time to time. Knowing this, can help you know when to ignore that monkey mind.

Graceful exits.

Sometimes life has other plans, and you’ve just got to get out of an investment sooner than you’d prefer. We offer some graceful exit strategy options.  


Risk profiles

This is sometimes known as your ‘Investor Profile’, and is a snapshot of your attitude toward risk in relation to your time horizon (see below).

A risk profile identifies the type of investor you are, based on your capacity to invest, and willingness to withstand times of market volatility. Your investor type may determine what mix of investments you consider, as different investments are suitable for different purposes.

Time horizons

In the land of investing, time horizons are normally thought of in the following time chunks: short term (0-3 years), medium term (4-9 years) and long term (10 years+).
A time horizon in investing is knowing how long you are prepared to leave your money in an investment. It’s important to honestly consider when you may need to withdraw the money and therefore what your time horizon may be.

The reason understanding your time horizon is important, is that knowing how long you are investing for can influence what you choose to invest in, based on your own personal goals. If you are considering an investment which is higher risk compared with other investments, then a longer time horizon is often preferred, to allow time for any unforeseen market recovery to occur if it is required.

Loss Aversion

Kahneman and Tversky coined the term loss aversion and describe it as “the disutility of giving up an object is greater, than the utility associated with acquiring it”. Changes are considered relative to a neutral reference point; and if a result (or change in situation) makes things worse (losses) loom larger than improvements or gains. Kahneman observed that “human beings experience losses asymmetrically more severely, than we do equivalent gains”.

In real talk, this means that we may feel a loss (even if it is only on paper) more than we experience a gain. Kahneman found the prospective pain of losing is about double the joy of winning.

Herd behaviour

This is when we do something, just because everyone else is doing it. The weight of seeing the group perform in a certain way can sway our perception of a situation (independent of rational thought).



If you annually ask yourself the following questions, they may help to inform your investment decisions, and hopefully lower your emotional response to any hype regarding market volatility:

1)      When do I need this money? What is my time horizon?

2)      What is my risk profile?

3)      Do I understand loss aversion, and can I override it?

4)      If I sell when markets dip, am I contributing to the market dropping?

5)      Does investing to match my values make it easier to hold steady in uncertain times?

6)      Can I balance my portfolio by including Bond or Money Market funds?

7)      Should I buy more investments in times of uncertainty because I can get more units with each dollar I’m investing?


QU 1. When do I need this money? What is my time horizon?

It’s important to be honest about the money you are investing. Is it truly money you do not need to touch for a long time, or is it money you might need in the next few years? Are you really invested for ‘future you?’ Investing in managed funds tends to be best played as a long game. Sorted suggest if you can plan to ‘stick it out’ over ten plus years, then industry commentary suggests that any market blips should have time to recover.

In saying this, we do urge all investors to be sure you know your personal goals and ask the questions “when do I need this money?” If it’s within 2-3 years and there is market volatility, then you may want to consider Mary Holm’s suggestion of withdrawing any high-risk investments slowly over a few months. By withdrawing funds in chunks rather than all at once, you buffer yourself from locking in the loss at just one unit rate (should you unexpectedly need to withdraw investments during any market downturns).

QU 2. What’s my personal Risk Profile?

Alongside understanding your goals, it’s also important to make sure your investments match your personal risk profile. Regardless of your age and stage, it’s worthwhile to annually revisit risk assessment tools to be sure that your investments match your profile. At Flint we suggest customers make use of the Sorted Risk Assessment Calculator.

The perk of being informed by tools such as these, is you can choose to select investments or managed funds that match your risk tolerance levels – and this in itself may help you to feel calmer during times of market uncertainty. For example, someone in their late thirties or early forties will likely have a higher risk tolerance (because their time horizon is probably longer) compared with someone nearing retirement, due to their different time horizon and when they need to withdraw funds. An understanding of your risk profile may help you keep calm in times of market volatility.

QU 3. Do I understand loss aversion and can I override it?

In the land of investments loss aversion, as covered above, is generally speaking about a “paper loss”. With investing the point at which you “lock in a loss” is when you sell your investments. While you still own funds, regardless of what the current unit price is, you still hold the same number of units. You have the choice to ‘sell’ and lock in the loss, or if you have time on your side (and don’t need the money) then you may choose to ‘wait it out’ or potentially ‘buy’ more if you’re a fan of dollar cost averaging strategies – which we mention below in item five.

While no investment specialist can predict what’s going to happen in the future, it is normal for investment markets to go up and down. Regardless of rationalising the likelihood that an investment will bounce back in the future, and telling our brains telling us to hold steady, human nature can get the best of even the most hard-core investor.

Loss Aversion, as detailed above, was first coined by Nobel Prize-winning psychologist Daniel Kahneman, when he wrote about loss-aversion in a famous 1979 research paper.

Kahneman found the prospective pain of losing is about double the joy of winning. The results of this study combined with platform data, suggests that even hard-core investors will struggle to beat those in-built human behavioural odds when markets plunge. Keep this in mind when you feel your heart and mind are at odds. If you find yourself in this situation you could ask yourself:

  • What are the actual costs of this loss? Can I afford them?
  • What kind of gains could I miss if I avoided this loss?
  • Will this loss today give me a return in the future?
QU 4. If I sell when markets dip, am I contributing to the market dropping?

Financial commentator Mary Holm’s made us chuckle, when she compared the herd mentality of people selling funds just because other people are selling funds to the supermarket shortages recently observed. It may not have occurred to you, that by participating in any panicked activity to sell units, you may be participating in a self full-filling prophecy. Mary points out that the more investors that panick and sell, the more likely the unit price of that investment is to fall.

Mary compared this type of herd behaviour to the recent bulk-buying supermarket shortages we’ve all observed during Covid. She even laughed at herself by saying that she normally buys long life milk, however when Covid hit and the shelves were getting empty she found herself buying more long life milk than normal. Her observation on the topic, was that humans are easily swayed by what others are doing around them. If others sell, and the unit price of an investment drops, she could empathise with why your natural tendency may be to sell your investments (when you maybe should be stopping to ask if you should buy more units while the unit price is cheaper, and your money will get you extra units for the same price).

In general, it’s not ideal to ‘bail’ purely because other people are, or because numbers turned red somewhere.

A reason to avoid selling when the value of an asset dips, it that selling during any down times is the only time when you truly lock in your losses. Up until you hit the ‘sell’ button the loss lives purely on paper. Devon Portfolio Manager Victoria Harris who speaks on The Curve comments that ’it’s only when you do decide to sell that your loss is crystalised and there is no chance of recovery‘.

Mary Holm also references studies that acknowledge that 18-25 year olds are more likely to do something just ‘because other’s around them are doing it’. That ‘something’ may be bravely (or foolishly) jumping off a bridge into a river. However, it also can apply to the financial company they keep over social media or in real life and may make them more easily swayed by investment commentary around buying or selling investments. If you mix within circles that have a tendency to panic, and may rush to sell at any times of uncertainty, you may like to stop for a moment and ask yourself if you should consider how a broader age demographic is responding.

We’re not necessarily suggesting you keep a wider circle of friends; however if you are in a position to be open minded to financial commentary and guidance from a range of mentors, or financial advisors,, then you may be more likely to make an informed decision about selling or buying investments during times of uncertainty.

QU 5. Will investing to match my values make it easier to hold steady in uncertain times?

The 2022 From Values to Riches study would imply the answer is yes. When you invest to your personal values, you may have read the fund philosophy of the managed fund you buy into. In doing so you may understand not only the historical performance of the fund, but you could also get an insight into the strategy and mindset of the fund manager, and an indication of how they might respond in future times of crisis. This may be comforting to understand, if you believe in their investment philosophy.

If there is one quote that proves true over time, in any industry, it’s that:

‘the only constant is change’.

Preparing for this fact and choosing fund managers who align with your values, and support companies you want to support, with investment philosophies you agree with, may help you to hold steady during any uncertainty. The flipside of this investment philosophy is that the companies which benefit from your investment may also feel grateful to have your support. They too have human emotions and may feel grateful if their unit price holds steady while they navigate and pivot to deliver future returns for their investors.

The recent release of the From Values to Riches 2022 study, also highlights that when people were investing responsibly, 50% of respondents felt more motivated to save money, knowing their money was ‘doing good’ in more than a financial sense.

QU 6. Can I balance my portfolio by including Bonds and Money Market funds?

A well-diversified portfolio will consist of different types of investments that have varying degrees of risk and correlation with each other. 

You can diversify across multiple areas including by:

  • investment vehicles (cash, shares, bonds, funds, ETFs etc.);
  • assets whose returns haven’t historically moved in the same direction (typically shares and bonds);
  • investment type (sector, industry, region, and market capitalisation);
  • in broader markets you may also consider different styles (growth, value etc.);
  • and in the fixed income space (maturity, credit quality, fixed/floating etc.).

At the other end of the spectrum some investors may prefer to concentrate their investments to possibly achieve greater returns, arguing that too much diversification may simply give you the return of the market.

You should always remember that the value of your investments and any income from them can go down as well as up and you may get back less than the amount you originally invested.  The key is to be aware of the risks you are taking, diversify where appropriate and manage your investments in line with your overall goals.

Evergreen Advice comments that ‘over the long-term shares deliver 8% to 10% per year. After accounting for fees and taxes, this means you can double your investment on average every 10 years. This is well in excess of other investment options such as term deposits’.

Mike Ross of Evergreen also comments that ‘The price you must pay for these higher returns is volatility – you have to accept that your investments will fall in value, sometimes significantly. No one can successfully predict what the share market will do over the coming days, weeks or months and so there is no way to avoid it. Selling shares when markets are going down, often leads to investors missing the market recovery, and therefore not achieving the 8% to 10% long term returns that shares can provide.’

As we touched on in question 4, your investment strategy should be consistent with your goals. If your goal is more about protecting your lifestyle or maintaining a certain level of volatility across your personal investment portfolio – then more conservative investments such as bonds or term deposits may provide stability in your investment portfolio and counterbalance the volatility of shares. A consideration when regarding this, is to make sure you understand how bonds and term deposits are performing in your current economic climate (which we won’t cover here - as they tend to be heavily correlated with what is happening with interest rates). Research is king, when considering the best time to include them in your portfolio.

Note: If you are looking for managed funds, that specialise in bonds, then please use the filters tab in the Flint app to show you a selection of managed funds available with a focus on bonds.

QU 7. What about dollar cost averaging?

Many investors prefer a strategy called dollar cost averaging. This is when you invest the same amount on a regular basis, regardless of what the market is doing. The key here is to continue to buy when the markets are down, as you are effectively buying units while they are ‘on sale’ and therefore have more scope to rise in value in the future! The theory across financial commentators  is that these investments you purchase during the ‘market dips’ can potentially end up being worth more in the long run, compared if you only buy popular units at a ‘market peak’. 

Mary Holm comments that it’s almost a silver lining of sorts, to celebrate these times when every dollar you invest buys more units. Mary suggests we should feel excited about this - while remaining mindful that in the future, when you average your investment over time, the dollar cost average of your investments may tend to balance out over a ten year time period.

Please keep in mind when adopting this strategy, that it may be most effective if you invest regularly with small amounts – and don’t wait to ‘time the market’. Financial commentators are quick to note that not even the best investors effectively time the market on a consistent basis, and having a buy and hold long-term approach tends to prove most effective when studies compare this strategy with the results of market timers*.

At Flint we have a growing audience of payday investors, who choose to  invest small amounts on a frequent basis to boost their confidence and unit holdings over time.


As much as we are fans of long term investing, sometimes life throws a curveball, and you just have to get out of an investment.

If you find yourself in this position, the comments in Qu 4. hold true: that if you don’t urgently need all the money at once, see if you can withdraw it over a few weeks or months to avoid locking in the loss at just one unit price on a given day.

By staggering any withdrawals during a market dip Mary Holm suggests that you ‘may benefit from the market making a small or significant recovery’ – and in that fashion not lock in the losses at just one point in time. Of course, if you need the certainty of withdrawing the money before the market drops further, then this strategy may not be not an option – however if you have a buffer and don’t need the certainty, then this strategy could be worth consideration.


The consensus on how to best navigate market volatility, is to agree that market volatility is always part of the investment game. We can’t expect returns without risk. To invest expecting only upward trends would be unrealistic.

Let’s conclude with some wise words:

“The reasons for any corrections don’t really matter in the grand scheme of things. Sometimes stocks go down. It happens. You don’t know when and you don’t know why but you know it’s going to happen. Plan accordingly.” – Ben Carlson

And Mary Holm also suggests that any ‘times of market uncertainty are not necessarily a time to panic, but a time to be more philosophical’.

If you are still feeling uncertain about investing and want more tips on how to feel more confident with money, we’d also suggest you check out our Top 10 Confidence Boosters to Reduce Financial Anxiety.

We wish you all the best with your investment decisions!

Happy investing!



All content shared is of a general nature, current to the time it was penned, and is not financial advice. Before making any investment decisions, please be sure you have completed full due diligence. This should include reading the product disclosure statement (PDS), considering fees and taxation, identifying your time horizons, and understanding the performance history and reputation of the investments you are considering.

Please note: When investing you are not guaranteed to make money (and on occasion you may lose some or all of the money you began with). Seek independent advice to establish if an investment is suitable for your financial situation and long-term wealth generation goals.


Ben Carlson on the Stock Market; Evergreen and Mike RossFSC Study; From Values to Riches study; George Carter from Nikko; Princeton Kahneman study; Mary Holm on Radio NZResearch IP on Risk; Sorted Glossary; Sorted Investor ProfilingSorted Kickstarter; Victoria Harris - The Curve