Summer Volatility: Why Staying Invested Matters More Than Ever
Stay focused and invested, as short-term market swings shouldn’t derail long-term goals.
Summer often brings images of relaxation, vacations, and slowing down, but the markets don’t always follow suit. In fact, the third quarter is historically one of the more volatile periods for investors. Between geopolitical uncertainties, changing interest rate expectations, and shifts in consumer and business sentiment, it’s no surprise that many portfolios feel a bit of turbulence this time of year.
At Prism Capital Management, we understand that market ups and downs can test even the most seasoned investor’s patience. But stepping back from your long-term investment plan in reaction to short-term movements can do more harm than good.
Here’s why staying invested this summer might be one of the most important decisions you make in 2025:
1. Timing the Market Is Nearly Impossible
When markets get shaky, it’s tempting to pull out and “wait for things to settle.” The problem? It’s incredibly difficult to time both your exit and your reentry perfectly. Missing even a few of the best-performing days in the market can have a significant long-term impact on your returns.
Example: Over the past 20 years, investors who missed just the 10 best days in the S&P 500 saw their returns cut in half compared to those who stayed invested.
2. Volatility Is Normal, Especially in Summer
June through September tends to bring lower trading volumes, which can amplify market swings. Add in earnings season, shifting economic data, and macro events like elections or global tensions, and it’s clear why volatility tends to spike.
But that doesn’t mean the sky is falling. Short-term fluctuations are a natural part of investing and often present opportunities for disciplined investors to benefit from lower prices.
3. Your Financial Goals Are Long-Term, Your Strategy Should Be Too
Most financial goals, like retirement, education funding, and legacy planning, are measured in years or decades, not weeks. Reacting emotionally to temporary market dips can derail your plan and delay your progress.
Staying invested means trusting the process you and your advisor have put in place, based on your unique timeline, risk tolerance, and goals.
4. Diversification Works Best When You Stay the Course
Diversification is designed to reduce risk, not eliminate it. Different asset classes react to volatility in different ways. Pulling out of the market during a downturn means losing the benefits of diversification and potentially missing the rebound across sectors.
At Prism Capital Management, we construct portfolios built to weather both calm and stormy conditions, so you don’t have to second-guess every market move.
Summer volatility is nothing new, but your response to it can make all the difference. Instead of letting headlines or heat waves shake your confidence, stay focused on the bigger picture. The best investing strategy is often the simplest: stick with it.
Financial Services for Real People
Founded for the benefit of clients, Prism Capital Management is an independent Seattle and Skagit-based firm with a deep commitment to providing guidance that is free of conflicts of interest, based solely on the sum of our experience and expertise. We are committed to putting client interests first and to stewarding both wealth and well-being for those we serve. We have a singular measure of success: the results we get for our clients.
As an Investment Advisor, we have a fiduciary duty to act in YOUR best interest. From planning to investment management to advice on buying a car, we are your financial life partners.
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