Stock Market Volatility: 3 Things All Investors Need to Know Right Now

Katie Brockman, The Motley Fool

Tue, Apr 15, 2025, 4:00 AM 6 min read

The past couple of weeks have been a roller coaster of ups and downs for the stock market, and many investors are feeling nauseated by all the volatility.

After ending the first week of April in a crash because of uncertainty surrounding President Trump's tariff policy, the S&P 500 (SNPINDEX: ^GSPC) experienced a historic rally -- only to fall yet again the following day.

Recent volatility aside, the S&P 500 is still down close to 13% since mid-February, as of this writing. That alone is causing many investors concern about a potential recession. If you're worried about how potential future volatility may affect your portfolio, there are three important things to keep in mind right now.

When stock prices sink, your portfolio could lose significant value. While it's certainly concerning to watch your account balance dwindle, it's important to note that you're not actually losing money as long as you stay in the market.

Stock prices fluctuate every day, and sometimes those dips are severe. But when it comes to how much you gain or lose, all that really matters is how much you paid for your investments and what you sell them for. The only way to lose money, then, is to sell after prices dip below what you paid.

For example, say you buy one share of stock for $500. If that stock jumps to $600 per share, you'll have increased your portfolio's value by $100. But you won't actually cash in on those gains unless you sell at that price.

The same principle works in reverse. If your stock falls to $400 per share and you sell, you'll have locked in a $100 loss. But as long as you hold your investment until its price eventually rebounds back to $500 or more per share, you won't have lost anything -- even if the path getting there was rocky.

The key to ensuring your investments rebound? Give them plenty of time. There are no guarantees in the stock market, but strong companies are likely to recover from even the worst crashes and recessions.

Historically, the market itself has a flawless track record of surviving periods of volatility. While we are in unchartered waters in many ways right now, this is not the first time the market has experienced unprecedented times.

For example, the Great Recession was the most severe financial crisis post-World War II, and many Americans were uncertain about the future of big banks and Wall Street itself. But the market still recovered. Fears surrounding the COVID-19 pandemic led to the S&P 500 losing more than a third of its value in less than a month, but the market recovered in that instance, too.