Written by David Rosbotham DipPFS | Financial Planner

If you’ve ever wondered how to invest in uncertain markets, strong years can actually be the most dangerous time for investors.

Positive market years feel great. Portfolios rise, confidence grows, and it’s easy to feel like you’ve finally cracked the code. But strong markets often plant the seeds of future mistakes.

This blog is a reminder, to myself and to investors, to stay humble, stick to your plan, and avoid being pulled off course by headlines, friends, or short-term performance.

 

Strong Market Returns Breed Overconfidence

One of the first lessons I learned when I joined a financial advice firm was:

“Do not celebrate or encourage a client to celebrate a good year in the stock market. You are only adding fuel to the fire when the markets correct.”

That always stuck with me.

When markets rise, confidence rises with them. When you find yourself talking about your great returns, or starting to see yourself as an expert, it’s time to take a step back.

There’s a powerful psychology behind investing:

    – When markets go up, we believe they will go up forever

    – When markets go down, we fear they will never recover

Both emotions can lead to poor decisions when deciding how to invest in uncertain markets.

 

The Cost of Trying to Time the Market

I often hear:

“I’m waiting for a market correction before investing.”

Then a 10% drop comes. They wait.
Then a 20% drop comes. They wait.

By the time confidence returns, markets have already rebounded and the opportunity has passed.

2022 is a perfect example. That year we had the highest number of inquiries from DIY investors.

Why?

Because both bonds and stocks fell at the same time.

“But that’s not supposed to happen. I read online that when stocks drop, bonds are the hedge.”

In theory, bonds hedge equity risk. In reality, markets don’t always behave as expected.

Many investors had already panic sold by the time they asked for advice. Their confidence was shaken, and they were searching for a new strategy to ‘beat the market’ after the damage was done.

And many of those I spoke to were reluctant to invest at all that year, wanting to ‘wait and see’. By the time they felt comfortable, they had missed much of the bounce back.

The reality of how to invest in uncertain markets is simple:

You cannot consistently time the top and bottom.

Events like COVID, 2022, and countless others show how quickly markets move. By the time the news is obvious, prices have already adjusted.

 

Behaviour Matters More Than Brilliance

Investing success is less about intelligence and more about behaviour.

‘A Genius is the man who can do the average thing when everyone else around him is losing his mind.’ Quoted by Dwight Eisenhower

In 2022, most of my time was spent advising clients not to sell to cash. This is where a financial planner adds real value.

I’m fortunate that clients I personally spoke with stayed invested and ultimately benefited from the strong returns in 2023, 2024, and 2025.

But success creates a new risk…

 

From Panic to Overconfidence (and Back Again)

Fast forward to 2025:

“I’m thinking of selling all my Bitcoin for silver because Bloomberg says we’re in a precious metals boom.”

I’m not here to debate which is the better investment. But silver had already risen around 250% in 12 months. Most of that move had likely already happened.

The biggest gains usually go to those who invest when nobody is talking about it.

Chasing headlines is not a strategy for how to invest in uncertain markets.

Another common conversation:

“My friend did really well in the stock market last year. I’m thinking of managing my own investments and just investing in the S&P 500.”

This came from a retired client in Switzerland who had previously said he didn’t like the stock market because his parents lost money in it. He described himself as a 2/5 risk profile and was happily retired.

From a planning perspective, this would be:

• Wrong currency
• 100% equities (too volatile for his risk profile)
• High risk of running out of money

 

Strong markets breed overconfidence.

And from a planning perspective: your plan is not your friend’s plan. Read more about this in our free guide: The Biggest Financial Mistake Smart People Make

 

The Value of a Fee‑Based Adviser

A good, fee‑based adviser does more than pick investments.

They help you:

• Understand your cashflow
• Decide which pots to withdraw from
• Stay tax‑aware
• Most importantly, act as a coach

 

They provide an objective view, without a vested interest, to help stop you making emotional and costly financial mistakes.

Often, the value is not in what they do, but in what they stop you from doing.

This coaching element is crucial when learning how to invest in uncertain markets.

 

The 8th Wonder of the World: Compounding

Charlie Munger once said:

“The first rule of compounding is to never interrupt it unnecessarily.”

Panic selling, trend chasing, and jumping in and out of markets interrupt compounding.

The real magic happens when you stay invested, stay disciplined, and let time do the heavy lifting.

 

How to Invest in Uncertain Markets During the Next Correction

There will be another correction. History tells us that 20% drops are not unusual.

The key is knowing that:

Volatility only becomes a permanent loss when you sell in panic.

Practical reminders:

• Stay diversified
• Know your income and expenses
• Stick to your plan…not someone else’s
• Stay humble in strong years

 

Strong markets are enjoyable.

But humility, discipline, and behaviour are what build long‑term success.

 

This blog is for educational purposes only and does not constitute financial advice.