Since February, markets have been extremely volatile due to escalating trade wars, particularly between the US and China, but also involving over 60 countries, including traditional allies like the EU and Japan.
In early April, the S&P 500 dropped over 10% in just two days. This isn’t just another correction, but a geopolitical and economic event we haven’t seen since the 1930s. Back then, the US introduced the Smoot-Hawley Tariff Act, triggering a collapse in global trade, and markets plummeted. Today, US tariffs have jumped from an average of 3% to over 20%, with far-reaching consequences.
No one knows how long this will last, but because this is unlike anything we’ve faced in recent decades, we need to respond with wisdom and not blind optimism.
Investment Response
One of my favourite stories from Jim Collins’ Good to Great is about Admiral James Stockdale, who survived over seven years of brutal captivity during the Vietnam War. He endured solitary confinement, torture, and hopeless conditions. But what kept him going was a powerful belief: “I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”
Yet, when Collins asked who didn’t survive, Stockdale replied, “Oh, that’s easy. The optimists. They were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”
Stockdale went on to say further: “This is a very important lesson. You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
Over the past few weeks, many have come out to urge investors to stay the course, to “buy the dips,” and to trust that markets always rise in the long run. While those reassurances come from a good place, I fear they may be insufficient. After all, the S&P 500 took 15 years to recover after the crash of the 1930s. I’m not saying history will repeat itself — and I hope it won’t — but if I’m going to encourage you to stay invested, I must also prepare you for the possibility of prolonged uncertainty. Otherwise, I risk turning you into an “optimist” who ends up disillusioned, bailing out halfway and realising your losses.
Financial Planning Response
If you had invested in the S&P Composite Index (S&P 500 index was only introduced in 1957) at the start of 1928 and held for 15 years through the Great Depression, your annualised return would’ve been just 2% p.a. Positive, but hardly sufficient for long-term goals. That’s why, as a firm, we don’t rely on the S&P 500 alone. We diversify globally and constantly reassess long-term expected returns of what we invest in. If those returns are expected to be lower in future, we need to adjust our clients’ wealth plans. Staying invested is important, but only when you know what those investments are likely to deliver. Otherwise, you may preserve capital but not fulfil your life goals.
If you’re approaching retirement in the next year or two, it’s time to reassess. After a strong decade of returns, your portfolio may already be enough. If so, consider securing the funds you’ll need for the first five years of retirement now. Blanket advice to “stay invested” doesn’t apply to everyone.
I recall a client during the 2008 Global Financial Crisis (GFC) who, despite being financially secure, insisted on divesting his portfolio. He couldn’t sleep or eat due to market stress, and it was affecting his health. So, we liquidated his holdings. What’s the point of staying invested if your well-being is deteriorating? Asking someone to “hold on” without understanding their situation is like telling someone with a heart condition to keep running through breathlessness. It’s irresponsible.
Life Response
To let this crisis pass without a life response would be a wasted opportunity. During the Global Financial Crisis, I had front-row seats to see how the relentless pursuit of returns stripped many of their peace. Some lost everything they’d built; a few even lost their lives. In 2010, in the aftermath of that crisis, I began to declutter my own life. I reflected deeply and gained clarity on my non-negotiable life goals. I moved back to public housing, kept only a small car for family use, and took public transport to work. I redirected my resources to support what truly mattered.
Living simply and spending below my means gave me peace. It freed me to make life and business decisions without being held hostage by money. I may be in a rocking boat in the middle of a storm, but I have rest.
If you’re feeling overwhelmed today — worried about job security, falling investments, or growing debt — this crisis might be your invitation to reset. Clarify what really matters. Stop buying things you don’t need, with money you don’t have, to impress people you don’t even know or care about. In investing, don’t chase after the best returns; rather, use an approach that gives you the highest probability of success. Peace isn’t found in more — it’s found in enough.
So, while “staying invested” may be popular advice, which we give to our clients too, but only after understanding their financial situation and life stage, it’s not one-size-fits-all. Before following it blindly, pause and think again. Don’t make investment or financial decisions in isolation. Life decisions must come first.
Crises like this are opportunities to realign. Don’t waste it, because you will never know when the next one will come — but when it does, may the choices you make now allow you to sleep soundly, even in a rocking boat.
When we get out of this crisis, I hope you too can echo what Stockdale said: “I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”
The writer, Christopher Tan, is Chief Executive Officer of Providend Ltd, Southeast Asia’s first fee-only comprehensive wealth advisory firm and author of the book “Money Wisdom: Simple Truths for Financial Wellness“. He is also a Certified Ikigai Tribe Coach.
The edited version of this article was published in The Business Times on 21 April 2025.
For more related resources, check out:
1. What Investors Should Know About the US Reciprocal Tariff and Market Volatility
2. Investing in the S&P 500 Alone is Not the Silver Bullet
3. How Should Investors Respond to Trade Wars?
Download our Investment eBook titled “A More Reliable Way to Get Enough Investment Returns: Even During Times of Market Uncertainty” here.
Through deep conversations with our advisers, you will gain clarity on what matters most in life and what needs to be done to live a good life, both financially and non-financially. You can learn more about our purpose-driven approach towards Wealth Management and Estate & Legacy Planning.
We do not charge a fee at the first consultation meeting. If you would like an honest second opinion on your current estate plan, investment portfolio, financial and/or retirement plan, make an appointment with us today.
