Content courtesy of Dimensional Fund Advisors. Author is Wes Crill, PhD, Senior Client Solutions Director and Vice President.
I was on holiday during the stock market’s recent ups and downs and missed out on the media coverage and the surrounding “will they/won’t they” China tariff news. That is actually my preferred way of coping with market volatility, which is to be unaware of it in real time. While I don’t always have a built-in buffer (Footnote 1), there’s certainly an argument for tuning out daily market movements.
The benefit of the ignorance-is-bliss approach can be visualized by plotting out returns at longer time intervals. As you switch from daily returns to weekly, the jagged edges begin to smooth out. By the time you get to monthly returns, some of the big drawdowns (e.g., 3rd quarter 2023, April 2025) seem like small blips during an otherwise continuous climb.
A desire to stay informed about what’s going on in the world is human nature, and developments with the stock market are part and parcel of that. But thinking about investments in a long-term framework might dull the temptation to make asset allocation changes that studies have shown are a recipe for disappointment.
Past performance is not a guarantee of future results.
In USD. S&P data © 2025 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio.
Footnotes
In this case, I was attending my octogenarian mother’s wedding. I’m not sure I can go back to that well again.
Disclosures
All expressions of opinion are subject to change. This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions. Diversification neither assures a profit nor guarantees against loss in a declining market.
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