Volatility in April: lessons in staying calm

April certainly kept investors on their toes. The old saying “April does what it wants” applied not only to the weather this year, but certainly to the financial markets as well. Share prices swung back and forth, sometimes dropping sharply only to bounce back just as quickly. Anyone watching the markets witnessed a great deal of uncertainty and rapid shifts in sentiment. So, what actually happened? And what can we learn from it?

News and worries

It all started with news of new US import tariffs and concerns about global economic growth. News like this always stirs things up: investors react fast, and prices can move sharply in a matter of days. The so-called volatility index shot up, showing there was more tension in the market than we had seen for a while.

Not every sector was hit equally hard. Tech stocks, for example, managed to recover after a shaky start. Gold and other alternative investments briefly became the safe havens of choice. Other sectors, such as retail and healthcare, were hit particularly hard.

What stood out?

What stood out most was how quickly sentiment could shift. One day panic seemed to dominate, only for a recovery to follow just days later. It shows that markets can be as unpredictable as April’s weather: unexpected twists are more the rule than the exception. People are often inclined to act on emotion; to sell when it is actually unwise, and vice versa. Yet the market does not care about emotion. Like April, it simply does what it wants.

Lessons to remember

• Staying calm pays off: panic selling is often where the biggest losses happen. In turbulent times, sticking to your plan is crucial.

• Spread your risks: not all investments move in the same way. A well-diversified portfolio gives you something to hold onto, even when things get rough.

• Let Mr. Market work for you: as Benjamin Graham said, “Mr. Market is your servant, not your instructor.” If you treat price changes as opportunities, volatility will work for you, not against you.

“Be fearful when others are greedy, and greedy when others are fearful.” – Warren Buffett

April’s ups and downs show exactly why we at Mpartners have always believed in value investing. Instead of chasing the latest trend, we focus on companies with real substance and solid foundations. Time and again, this approach proves itself. Warren Buffett, probably the world’s best-known value investor, has shown that moments of crisis are often the best times to invest in quality at a good price. His advice is simple: “Be fearful when others are greedy, and greedy when others are fearful.”

Read more about the investment strategy of Mpartners here.