Why long-term investors outperform during market volatility

Understanding What Happened in Early 2025

Between late March and early April 2025, global markets experienced a sharp downturn. Renewed trade tensions and broader geopolitical uncertainty led to a sudden decline in investor confidence. On 3 April, the S&P 500 dropped by 4.84% in a single day. This caused many investors to question whether they should stay invested or sell their holdings to avoid further losses.

At GSB Wealth, our message to clients was clear. Do not panic. Stay invested. Stick to the plan. Short-term market shocks are part of the investment journey and should not lead to long-term regret.

This article is written by Mauro De Santis Bo, following his earlier piece, Why Diversification Matters: 3 Investment Mistakes to Avoid in 2025, which explored how thoughtful portfolio construction can protect investors from unnecessary risk.

Why diversification matters: 3 investment mistakes to avoid in 2025

100% Equity Portfolio Returned from 24-04 until 08-04

GSB 100% Equity Portfolio Performance – 24 March to 8 April 2025 – Source FE Funds

The initial decline: Confidence tested

From 24 March to 8 April 2025, our 100% equity USD portfolio declined by 12.67%. This sharp correction tested investor discipline. Understandably, several clients contacted us, concerned about what to do next.

Rather than react emotionally, we worked through their financial plans. With proper guidance and a long-term perspective, they chose to stay invested.

Markets are cyclical. Declines are not a signal to abandon a strategy that is built for the future.

The rebound: Why patience paid off

From 8 April to 27 May, the portfolio rebounded by 16.51%. This recovery came quickly. Clients who stayed invested saw their portfolios recover faster than expected. In contrast, those who exited the market during the downturn likely missed out on these gains.

This is why market timing is so difficult. Most recoveries begin before investors are ready to re-enter.

100% Equity Portfolio Returned from 08-04 until 27-05

GSB 100% Equity Portfolio Performance – 8 April to 27 May 2025

The full cycle: A positive return despite volatility

Looking at the full picture from 18 March to 27 May, the portfolio delivered a net positive return of 2.93%. Despite experiencing a large drawdown in early April, investors who stayed invested ended up ahead.

Those who sold at the bottom would have locked in losses and missed the opportunity to recover their portfolios.

GSB 100% Equity Portfolio Performance – 18 March to 27 May 2025

GSB 100% Equity Portfolio Performance – 18 March to 27 May 2025

What can we learn from this?

This market cycle reinforced several long-term investment principles:

  • Volatility is normal
    Markets go up and down. Corrections happen, but they are not permanent setbacks.

  • Timing the market rarely works
    Missing just a few days of recovery can significantly impact long-term performance.

  • Having a financial plan helps you stay focused
    A clear strategy provides structure during emotional moments.

Why you need a financial adviser during uncertain times

At GSB Wealth, we help our clients maintain focus during market uncertainty. Our role is not just to build investment portfolios, but also to provide behavioural guidance and long-term perspective.

We work with clients to:

  • Understand the difference between temporary noise and lasting change

  • Build personalised strategies tailored to their financial goals

  • Keep decisions aligned with long-term objectives

  • Act as a sounding board when markets get difficult to navigate

Financial planning is not just about numbers. It is about managing emotions and making disciplined decisions over time.

A final word: What should you do now?

Volatility will continue to be part of investing. But with the right structure and advice, you can manage risk without abandoning long-term goals.

If recent market events have made you question your investment approach, now is a good time to have a conversation. We offer complimentary portfolio reviews and planning discussions. These are designed to help you make informed decisions that support your financial future.

Summary

Staying invested during a market correction is often the better decision. In 2025, clients who stayed the course saw their portfolios recover within weeks. Long-term investing requires patience, planning, and perspective. A qualified adviser can help provide all three.

Get in touch

Contact GSB today if you would like to discuss any of these matters with our in-house team.

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Disclaimer

This article is published by GSB Capital Ltd, which is registered with the Dubai International Financial Centre (DIFC), licence no. CL4377, and regulated by the Dubai Financial Services Authority (DFSA) under licence no. F006321.

The content is intended for general information purposes only and does not constitute financial, legal, or tax advice. Any views expressed are those of the author and may not reflect the views of GSB Capital Ltd as a whole. Past performance is not indicative of future results, and all investments carry risk. You should always seek personalised advice from a qualified financial adviser before making investment decisions.