
Mutual funds for every objective
Mutual funds come in a wide variety of styles to meet the varying needs of investors.
Mutual funds come in a wide variety of styles to meet the varying needs of investors.
04/29/2025
INVESTING ESSENTIALS
The start of 2025 delivered a lot of volatility in the markets. When investing in the stock market, it’s important to have a plan for managing market volatility. Keep in mind, there is no perfect plan that can counter all the negatives when volatility happens, and the markets drop. However, since 1985, the stock market ended in positive territory more than 75% of calendar years. The graph below shows this history of intra-year declines compared with calendar year returns for the S&P 500® Index, which is a market-cap weighted index that represents the average performance of a group of 500 large-capitalization stocks. Green highlights the calendar year performance of the index, and red highlights the largest period of downward performance within each calendar year.
Finding comfort in market volatility is the key to investing in the markets. Markets go up and down, and volatility can also vary greatly with the types of investments you select.
Whatever happens with the market, there are steps you can take that may help to handle the effects of volatility.
1. Diversify
Balance your portfolio by increasing the diversification of products and asset classes you include—which could help with downside protection and reduce risk during volatile market periods.
2. Don’t try to time the market.
Timing the market or making decisions by attempting to predict the future is not a practical strategy. It is very risky, can result in high fees and potentially lead to lower long-term returns.
3. Keep buying even during volatile periods
Dollar cost averaging is the strategy of investing a set amount of money in an investment on regular periodic intervals. If you’re invested in a company-sponsored retirement plan at work, there’s a good chance you’re already using dollar cost averaging through your regular payday contributions to your plan.
What makes dollar cost averaging popular with investors is it avoids the risk of trying to time the market. You may have investments made at times when prices are high, but the intent is you’ll also hopefully have investments made at times when prices are low—averaging out your purchasing power.
Volatility will always be a part of the market, but there are options to help smooth out the bumps. Keep in mind, although these can help reduce the risk of investing, nothing can eliminate risks. These steps cannot guarantee a profit or protect against a loss in a declining market.
Learn more about how Thrivent Asset Management can help plan your path to investing.
Any indexes shown are unmanaged and do not reflect the typical costs of investing. Investors cannot invest directly in an index.
Results shown assume reinvestment of dividends or interest.
Index performance is not indicative of the performance of any Thrivent product.
Past performance is not necessarily indicative of future results.
Dollar cost averaging does not ensure a profit, nor does it protect against losses in a declining market. Because dollar cost averaging involves continuous investing, investors should consider their long-term ability to continue to make purchases through periods of low price levels and varying economic periods.
The concepts presented are intended for educational purposes only. This information should not be considered investment advice or a recommendation of any particular security, strategy, or product.