Volatility has been roiling the markets. But advisors have got the tools to deal with it

My first job as a financial journalist began in early October 2008. As I walked down Wall Street for my first day of work, the financial collapse was gathering steam all around me. Lehman Brothers had declared bankruptcy just weeks earlier and stock markets were crashing around the world.

Each night, leaving the office, I ran a gauntlet of camera crews staking out our building − hungry for any word from the traders inside. It felt like being in the eye of a storm. But despite the chaos, it wasn’t the end of the world. And it gave me a lasting respect for what markets can absorb.

Make no mistake: the last 12 months have tested that resolve. From President Donald Trump’s “Liberation Day” tariffs to the oil price shocks triggered by this year’s conflict with Iran, volatility has been a constant companion.

But volatility is also an invitation. As author Morgan Housel has argued, it is effectively the “price of admission” to the superior long-term returns that equities can deliver. The discomfort isn’t incidental − it is the mechanism.

Data tied to the VIX volatility index, which is Wall Street’s “fear gauge,” certainly back this up. The Wells Fargo Investment Institute has highlighted how, when the VIX spikes to a level above 40, notable S&P 500 gains often follow over a 12-month period. Hot on the heels of “Liberation Day,” for example, the VIX hit 40 on April 4, 2025, and from that day to April 6, 2026, the S&P 500 gained 31.9%.

Research released in December by Trueshares found that, over 10 instances when the VIX surged 50% in a single month, the S&P 500 saw greater returns one year later than the historical 12-month average. Indeed, there were only three out of the 10 instances when the S&P 500 didn’t see gains over that period.

And for advisors, it’s also good for business. Some 78% of the 783 financial advisors in a recent survey by tech platform for diversified investments Insperex said volatility increases client engagement and communication − and the same share said it generates opportunities to demonstrate their value.

So how do you seize that opportunity? In this issue of InvestmentNews, we examine how RIAs and independent broker-dealers are equipping their advisors for volatile markets. We also look at the products and approaches advisors are using, from buffer ETFs to long-short SMA tax strategies. And Cambridge Investment Research CEO Amy Webber talks M&A and shares how AI is reshaping the advisor experience.

Advisors know that being out of the market isn’t an option. If an investor missed the 10 best days in the market between 2006 and 2025, their S&P 500 returns would have been more than cut in half, according to recent J.P. Morgan data.

Set against this backdrop, mindset matters. As Richard Reyle, co-founder of Questar Capital Partners, put it to me recently, “It’s kind of like doing a lifeboat drill. There’s going to be turbulence, and so these kinds of days are not only expected but they’re necessary.” His point cuts to the heart of the advisor’s role − helping clients understand that volatility isn’t a flaw in the system.

It’s the reason the returns are there at all.