Why perspective matters during market volatility
Providing perspective on the situation within global asset markets.
Just over two weeks ago, we noted that expectations for improving economic activity appeared well founded.
However, the situation within the Middle East has had a sudden impact on global markets. Disruption to energy supplies is already beginning to have an impact on the global economy. For example, Singapore Airlines and British Airways have both suspended flights to Dubai, and Pakistan has introduced nationwide fuel-conservation measures.
The current adjustment to asset values* has been swift, but relatively modest. Since the beginning of the year:
- Global Equities: Down 3.0%
- Global Bonds: Down 0.5%
However, this is now the fourth market shock for our clients in just the last six years.
History shows that markets have recovered from similar periods of disruption.
The decade began with the COVID-19 pandemic shutdown, followed by an inflation shock through 2022, a tariff shock in 2025, and now this conflict. While each of these events has had an ever-decreasing impact on global equities, that doesn’t make a drawdown any easier to bear. It is understandable that some clients may become weary of frequent volatility. However, long‑term data* continues to tell a constructive story for patient investors:
Resilience: Since the pandemic, global equities have risen over 85%.
Recovery: Since the inflation shock, global equities have risen over 42%.
Recalibration: Since the tariff shock, global equities have risen over 14%.
Looking back, remaining patient and staying invested has consistently proved to be a sensible approach.
Diversification has proved more challenging since COVID, largely because governments have responded differently to previous economic cycles.
Fiscal deficits — the gap between government spending and tax revenues — have not reduced in the way they typically have in past economic cycles.
Deficits place extra burden on bond markets (i.e. borrowing) to fill the gap. The UK is at the sharp end of this dynamic, with government borrowing costs recently reaching a 28-year high.
However, government bonds still provide a reliable source of income and are backed by a sovereign guarantee – thus they remain a strong addition within our global portfolios.
True Potential Portfolio clients also remain diversified by exposures to foreign currencies, such as US dollar and euro.
We remain optimistic on the economic outlook but recognise the consequences of ongoing events – higher consumer prices are an inevitable outcome. Yet, there is the potential for a calmer economic environment if negotiations continue.
The post-COVID recovery was a valuable lesson in the sensitivity of global supply-chains to prolonged disruption. Today, the global economy remains ‘open for business’ and governments appear ready to provide targeted support to households.
Our investment approach remains firmly long‑term, and True Potential Portfolios will continue to support the growth of your investments over time.
*All prices sourced from Bloomberg LLP, as at 27 Mar 2026; equity moves as measured by MSCI World, GBP-terms and bond moves as measured by Bloomberg Global Aggregate Bonds, GBP-terms.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest.
This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.
Opinions, interpretations and conclusions represent the views of True Potential Investments at the date of publication and are subject to change. Forecasts are not a reliable indicator of future results.
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN 527444. Registered in England and Wales as a Limited Liability Partnership No. OC356027.
True Potential LLP is registered in England and Wales as a Limited Liability Partnership No. OC380771.
