How regular investing keeps your goals on track in volatile markets

One of the most important lessons for investors is to focus on what they can control. While the economy, interest rates and market fluctuations are beyond our reach, how we manage our portfolios is within our power. "Investors should really focus first and foremost on their goals. And people will have multiple goals with multiple timelines,” he says, adding that investors need to understand that markets have periods of downturn and returns will range over time.

“A lot of talk about the current environment, whatever that might be, does not provide a lot of nuance in a very complex world,” Keaveney says. “There are always multiple factors in play and simple theories often miss the complexity of markets.”

“Diversifying has been called the only free lunch that you get in investing,” Keaveney says. A balanced portfolio, which includes a mix of equities, bonds and cash, not only helps manage volatility but also positions investors to benefit from various market conditions. “When one zigs, the other might zag, or at least they don't move in lockstep," he says.

He recommends balanced funds as an effective vehicle for investors to reap the benefits of a diversified portfolio and stay focused on long-term goals. “Diversified balanced funds are a very effective tool in supporting positive investor behaviour,” Keaveney says. “The balanced wrapper shields an investor from noticing individual asset classes that have underperformed over short periods, and therefore they're more likely to stay invested.”

Consistent investing, even in small amounts, can have a profound impact on wealth accumulation. “I can't stress enough the benefits of regular investing,” Keaveney says.

As the podcast host, Lucreziano highlights the benefits of regular investing with a quick calculation: Let's say you put away $300 every month over a 40-year time period. If you earn a 5% rate of return net of fees over that time, you'd accumulate nearly $450,000. In this example, the initial contributions add up to only $145,000 over that period. The rest is compound growth.

“A major financial goal for most people is to finance a comfortable retirement,” Keaveney says. “That's where regular investing comes in quite clearly.”

“There is no such thing as an investor who does not make mistakes, but you can learn from your own mistakes. And you can also learn from those of others,” Keaveney says.

He emphasizes the importance of staying curious about what drives markets over the long term and remaining optimistic about the future. "While pessimists and so-called realists can sound smart in the short term, it's the optimists who win over the long term,” Keaveney says. “A certain amount of optimism is a trait of the most successful investor. When you are investing, you're investing for a period in the future. And you have to have a belief that the future is going to have some sort of positive outcome.”

Finally, Keaveney says, successful investors understand that investing is about managing probabilities rather than relying on guarantees. “Folks who understand that there's a certain probabilistic degree to the outcomes will end up being more successful than others who require a very clear and unfettered outcome,” he says. This means being comfortable with volatility and occasionally taking a contrarian approach, such as buying low when market sentiment is negative.

Investing can feel daunting, especially in a world full of noise and short-term distractions. However, by focusing on what you can control, you can build a solid foundation for long-term wealth. As Lucreziano concludes in the podcast, "While you can't predict the future, you can prepare for it by being disciplined, diversified and continuing to invest regularly."