As at the time of writing, share markets have largely recovered from the volatility that began in February 2025 and intensified sharply in early April. That period in early April was marked by extreme investor fear, which, as is often the case, triggered an outpouring of exaggerated predictions and doomsday headlines about what might come next.
The U.S. market (S&P 500) fell as much as 19% from its mid-February peak. The Australian market (ASX 200) followed a similar trajectory, down around 14% from its highs.
On the surface, these are unremarkable corrections – well within the bounds of what long-term investors should expect from markets over time. What made this event feel so dramatic was the speed of the decline. More than half of the losses occurred over just two trading days, with daily falls exceeding 5%. It was the kind of volatility we hadn’t seen since the COVID crash in 2020.
And just as the drop came quickly, so too did the recovery. Despite the steep falls and the flood of panic-stricken headlines, April ultimately ended only about 1% down.
But in those two days, the investment world briefly lost its memory – again.
This article follows a similar theme to one written during the COVID downturn: Market Crashes and Investor Emotions. It looks back at the headlines that dominated the first week of April 2025, how they failed to reflect reality, and the impact that fear-based messaging can have on investor decision-making.
The Reactions
The following headlines appeared over the weekend of April 5th and into Monday the 7th – right in the midst of the sharpest declines. This was when markets were experiencing their most severe volatility, with back-to-back daily losses exceeding 5%.
You’ve seen this before. The headlines practically write themselves during a crash. Most investors will scroll past them without acting. But not everyone.
For some though, this kind of language holds weight. It feeds anxiety, magnifies doubt, and can push people into making decisions they’d otherwise avoid. Selling out in fear might feel rational at the time, especially when every article seems to confirm that instinct.
But if you had acted on those headlines – if you’d sold on that Monday – you would have missed a 12% rebound in the following three weeks.
But this time it’s REALLY different!
There’s a common tendency during every market downturn to believe that this one is fundamentally different. Even seasoned investors fall into the trap. We remember that we got through previous crashes, but we often forget how anxious we felt in the moment. That’s just recency bias – placing far more weight on what we’re experiencing now than on everything that came before.
This most recent downturn, largely triggered by Donald Trump’s tariff announcements, was quickly painted as something unprecedented. Commentary emerged suggesting the end of U.S. market dominance, the collapse of global trade, and the start of a new economic order. In other words, this time really was different.
And it might be. We could indeed be on the cusp of a black swan event that reshapes the world in ways we can’t yet imagine. But here’s the problem: you only ever know that in hindsight.
There’s a small group of commentators who’ve built careers around predicting these seismic shifts, some with high profiles, like Ray Dalio. To date, none of the world-altering outcomes they’ve warned of have materialised. Could they eventually be right? Of course. But the more important question is: how much opportunity has been lost by investors who took their warnings as a reason to stay on the sidelines?
To be clear, this isn’t to say that another crash isn’t coming, possibly soon. It’s just that no one knows. Especially not during a crash.
What has been proven over and over again is the value of staying the course. Portfolios should be constructed with the knowledge that these shocks will happen. And they are shocks. They’re never easy to live through. But they’re also the very reason we get rewarded for investing in the first place. If markets only went up in straight lines, there’d be no risk premium.
Investing always feels uncertain. In turbulent times, that uncertainty feels heightened, but that’s just perception. The truth is that markets are always uncertain. We might be on the brink of global conflict, or we might be heading into a period of unexpected peace. No one knows which until after the fact.
What we do know is this: one investment strategy has worked reliably for over a century. While other strategies have come and gone, this one has stayed consistent. It’s really very simple: buy and hold.
Portfolios should be built with the full expectation that another crash will come. That’s not a bug, it’s a feature. These events are part of investing, and they shouldn’t be a surprise when they arrive.
“Stay the course. No matter what happens stick to your program. I’ve said stay the course a thousand times and I meant it every time. It is the most important single piece of investment wisdom I can give to you.” Jack Bogle – Vanguard.
