An older woman is sitting in front of a laptop and looking at someone out of the frame.
Investing strategies

Trading during volatile markets

It's natural to feel anxious about your investments when the markets are volatile. See how you can weather the market swings.
3 minute read
success

You have saved this article
Investing strategies
Online trading
Education
Page
Market volatility

Points to know

  • Trading volumes are high during volatile markets.
  • Volatile markets can delay executions of trades.
  • Don't let emotions override the decisions you made for your long-term financial plans.

What to expect

Volatile markets are extreme and unpredictable. They're characterized by:

  • High trading volumes.
  • The inability of market makers and specialists to quickly match buy and sell orders.
  • The imbalance of trade orders in one direction.

Under these conditions, stock prices can change quickly and dramatically. Real-time quotes can lag behind actual market movements.

Trading tips

When you're placing trades in volatile markets, keep these points in mind:

Orders may be delayed

Your order may execute at a price significantly different from the quotes displayed when you entered your order.

Set prices to reduce risk

Placing a limit order allows you to set an upper or lower limit on the amount you're willing to pay or accept for a stock. There's no guarantee your order will execute.

See examples of how order types work

Watch for systems slowdowns

Because of heavy trading volume in a particular security or the market overall, you may not be able to place an order electronically or you may have difficulty reaching an investment professional by phone.

KEEP IN MIND

It's tempting to want to do something when markets are volatile. But that's exactly when you shouldn't act on emotion.

Take a step back and think about your long-term goals and asset allocation. Don't let the day-to-day market noise send you off course.

If your reasons for investing haven't changed and you have a diversified portfolio of stocks, bonds, and cash investments, doing nothing is usually best.

Find out more about investing during volatile markets

See how to create a plan to reach your investing goals

Saving for retirement or college?

Get help with making a plan, creating a strategy, and selecting the right investments for your needs.

Start with your investing goals

Already know what you want?

From mutual funds and ETFs to stocks and bonds, find all the investments you're looking for, all in one place.

Find investment products

Market

The trading of a universe of investments, based on factors like supply and demand. For example, the "stock market" refers to the trading of stocks.

Limit order

An order to buy or sell a security at a specified price (limit price) or better. The execution is not guaranteed.

Securities

Stocks, bonds, money market instruments, and other investment vehicles.

Asset allocation

The way your account is divided among different asset classes, including stock, bond, and short-term or "cash" investments. Also known as "asset mix."

Portfolio

All the securities held by a mutual fund or the total investment holdings of an individual or an institution.

Stock

A security that represents part ownership, or equity, in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits, some of which could be paid out as dividends.

Bond

A debt security (IOU) issued by a corporation, government, or government agency in exchange for the money the bondholder lends it. In most instances, the issuer agrees to pay back the loan by a specific date and make regular interest payments until that date.

Cash investment

Very short-term investments—such as money market instruments, CDs (certificates of deposit), and Treasury bills—that mature in less than one year. Also known as cash reserves.

Explore professional advice

We offer expert help at the low cost you'd expect from Vanguard.

Compare advice options

Open or transfer accounts

Get started

All investing is subject to risk, including the possible loss of the money you invest.

Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.

The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.

VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.