The first six years of the 2020s have been anything but uneventful.
Geopolitical conflicts, trade disputes, rapid advances in AI, and a global pandemic have all created significant market volatility and, at times, may have tested your nerves.
Yet despite these major disruptions, markets have delivered positive returns over the decade so far.
However, amid persistently negative headlines and uncertainty, tuning out the noise can be challenging.
Read on to discover what the past six years can teach you about investing.
The 2020s have seen multiple events that shook the markets
Since the start of 2020, there have been multiple events that have caused significant market reactions, including:
- The Covid pandemic, which led to the shutdown of the global economy and saw markets fall by 34% in 32 days.
- The Russian invasion of Ukraine, which led to the highest inflation in 40 years.
- The mini-budget gilt market crisis.
- Israel’s invasion of Gaza.
- The launch of the Chinese AI model DeepSeek, which triggered a mass sell-off, with Nvidia losing over $500 billion in a single day.
- Trump’s Liberation Day tariffs.
- The US and Israeli invasion of Iran, which caused the Strait of Hormuz to shut off.
You may have felt like some of these events were a turning point at the time, and that the road to market recovery would be long and drawn out – but that was not the case.
Markets performed well overall throughout the decade so far
Despite the uncertainty created by some of the global events listed above, markets have continued to deliver strong returns throughout the 2020s.
The S&P 500, which is often used as a benchmark for global equities, closed 2019 at around 3,231. By the end of April 2026, it had risen to 7,209, having recently surpassed 7,000 for the first time, marking a gain of 123% in just over six years.
This is all while serious events were dominating the headlines and leading to market downturns along the way.
Of course, worrying about the world around us is a natural human response. But hindsight offers perspective and often reminds us that short-term movements and long-term outcomes are typically very different.
Indeed, the risk of missing out on a recovery can be more damaging than a market decline. History shows that while volatility is inevitable, markets have typically recouped losses and continued on the path to long-term growth.
The graph below shows the performance of the S&P 500 during the 2020s alongside some of the major events of the decade so far.
As you can see, markets have not been calm over the past six years, but they have been resilient.
So, while downturns may feel unnerving, the market has shown itself to be far more durable than short-term headlines suggest.
Returns are often strongest after a downturn
It’s common for the strongest periods of returns to follow downturns, meaning investors who panic and sell often risk missing the recovery.
Research by Schroders found that returns one year after major crises are often particularly strong. For example, after an 8.9% single-day drop during the 2008 financial crisis, the S&P 500 rose by 39.3% over the subsequent year.
The difficulty is that these moments rarely feel like opportunities at the time.
However, successful long-term investing is typically not defined by avoiding the market during periods of uncertainty, but by maintaining discipline through it.
The key principles of an evidence-based approach can help you through uncertain times
An evidence-based approach to investing offers a framework for long-term success, helping investors overcome market downturns and periods of uncertainty, based on historical trends and data rather than emotional responses.
The core principles are simple:
- Maintain a long-term focus
- Build a diversified portfolio
Diversification helps to reduce your reliance on any single region, sector, or asset class. It means you can offset losses in one area with gains in others and also gain exposure to wider growth opportunities.
However, even the most carefully constructed portfolio relies on your ability to remain disciplined and committed to your plan when markets become volatile, which is where a long-term perspective comes in. It’s important to focus on the market’s long-term trend towards growth rather than periods of short-term volatility.
Markets will always react to global events and periods of uncertainty, so it’s important to have a plan in place. By incorporating these two simple but powerful principles, you can build a plan that’s designed to weather market fluctuations and built to capture long-term growth.
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Email us at hello@vwmwealth.com or call us on 0141 229 4004.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
