“In shaky times, investors should hold their nerve”…but should you?

I recently came across an article by a fund manager titled “In Shaky Times, Investors Should Hold Their Nerve.”

It is a phrase that often circulates in the investment world. It sounds wise, calm, and reassuring. But the real question is this, does it apply to every investor?

Let us imagine a simple world with just 100 fund managers, each offering one fund. Over time, performance tables emerge. Some funds perform well, others do not. If you happen to be invested in one of the top performers, then perhaps “holding your nerve” makes sense.

But what if your fund sits in the bottom half of that list? Should you still hold your nerve?

Probably not.

In my simple example, there were only 100 funds. In reality, there are thousands of fund management groups and tens of thousands of funds, all promising something slightly different. The sheer volume makes it almost impossible for investors to identify the true winners, which is why blindly “holding your nerve” often means holding on to something that may never deliver.

Here is the uncomfortable truth. Every fund manager will tell you to stay invested, especially when markets wobble. And why would they not? If you withdraw your money, they lose the fees they earn from managing it. So when they tell you to “hold your nerve,” it is worth asking, is that advice about your best interests, or theirs?

In the real world, things are more complex. Few investors truly know where their funds rank, or whether they are achieving the right outcomes for the risks they are taking. Many rely on reassurance rather than evidence.

Before you take comfort in the phrase “hold your nerve,” pause for a moment and ask yourself,

Are you invested in the right fund for your goals?

At The Wealth Coach, we help clients understand when to hold firm and when to make a change. It is not about reacting to headlines, it is about ensuring your investments always align with your long-term goals and financial wellness.