How savvy traders can play the long game through volatility
Just because the market's in flux doesn't mean investors need to panic. We've got five fundamentals for navigating challenges.
Given the upcoming election in Australia and the eccentricities of US politics, it's no surprise that many investors are concerned about market volatility.
But a key part of being a long-term – and successful – investor is knowing how to weather storms like the current one.
Every investor's circumstances are different. You should make decisions to suit your own investment goals and risk tolerance.
"Long-term retail investors need to keep a level head during turbulent times," says Josh Gilbert, market analyst at eToro.
"The key is not to panic, which can be easy after checking your portfolio. If you have a long-term investing plan, stick with it. A plan helps investors stick to the good ideas they came up with during calmer times. Those who consistently add to their long-term stock exposure tend to do well over time."
With this in mind, some broad principles can be applied.
1. Portfolio diversification
Diversification is a fundamental principle of investing.
This is because during market volatility, not every sector is equally affected.
Diversifying your portfolio requires an outlay on your part. However, it also allows you to buffer other segments of your portfolio against choppy waters.
For some, this will mean investing outside of your usual preferred industries.
But it can also mean considering alternative investments altogether.
Commodities, currencies and crypto have all seen interest as an alternative to traditional stocks.
Although all investments are subject to fluctuation, some – like gold – have proven to be remarkably resilient, in spite of surrounding market conditions.
"The current volatility highlights the importance of diversification in an investment portfolio," says Gilbert.
"By spreading investments across a variety of assets, diversification reduces the impact of any single asset's poor performance. Gold has been a staple in investment portfolios for centuries, and even in 2025, it's still proving why it deserves a place. It's like an insurance policy for your portfolio; when share prices are falling and uncertainty is high, gold can provide a proven sense of stability."
eToro offers a range of Smart Portfolios that can serve as a gateway to diversification. These are chosen from historically high-performing assets.
Smart Portfolios cover stocks – but they also offer a range of assets, including commodities and crypto.
Explore eToro Smart Portfolios
2. Keep up to date with the latest developments
Making sure you've got the latest information at hand is crucial for making investment decisions – both short and long-term.
"It doesn't matter if you are a complete beginner, an experienced investor, or anywhere in between, the eToro Academy can help you deepen your understanding of the markets and grow your investing skills," says Gilbert.
"Whether it's a course, video, guide, or podcast, the academy helps investors grow their knowledge across financial markets. Benjamin Franklin, one of the world's most famous and successful investors, once said, 'An investment in knowledge pays the best interest'."
Similarly, staying educated about broader investment principles and being able to put current events into a wider context can also help you keep a cooler head.
To help investors with this process, eToro offers eToro Academy.
eToro Academy provides members with access to
- Educational resources
- Online courses
- Webinars
- Podcasts
- Regular market updates
eToro also offers a dedicated news and analysis service.
Start learning with eToro Academy
3. Practising strategies
No matter how effective your initial trading plan, the journey to successful investment is rarely linear.
During chaotic periods – like when tariffs and trade wars are being discussed! – it can be very tempting to ditch your current plan and opt for a new course of action.
This isn't an easy call to make.
Sometimes, staying the course is the correct approach. But changes in the market can also require a change of strategy, while also presenting new opportunities.
If you do opt to change, it's essential to have a method of testing your planned adjustments.
One option is eToro's Demo Account.
This provides you with $100K of virtual cash, which you can then invest under real market conditions.
"Starting with a demo account allows investors to get a feel for capital markets before committing their own capital," says Gilbert.
"This means understanding how financial assets trade and react to market events and how to buy and sell assets. The old saying goes, 'Practice makes perfect', and that can be applied in investing."
Get started with an eToro demo account
4. Trading multiple markets
Having access to multiple markets around the world offers several advantages.
It's easier to diversify your portfolio and gain access to a broader range of industries.
Trading across multiple markets also means you can potentially offset volatility in one market by relative calm in another.
"In times of market turbulence, not all sectors or individual stocks react the same way; some may even see gains, which can help offset losses in other areas," says Gilbert.
"Another great example is geographical diversification. European stock markets have been on a strong run this year, even as global markets have pulled back thanks to strong earnings growth."
The number of markets you can access is generally dictated by your trading platform.
Currently, eToro provides access to 16 different markets around the world.
5. Use risk management effectively
Risk management is always important for investors, but especially so when the market is in turmoil.
"A simple strategy like dollar-cost averaging can be highly effective," says Gilbert.
"It rewards consistency over timing, allowing you to protect against the unpredictable nature of markets by spreading out your investments over time, typically in even increments."
Automated tools can also help.
eToro allows you to use a Stop Loss or Take Profit on your investments.
- A Stop Loss automatically closes a trade once a certain level of loss occurs – you decide how much in advance.
- A Take Profit will automatically close your trade once it has gained a certain amount of profit, also pre-determined by you.
When tools like these are paired with a sound strategy, it can be easier to weather investing storms.
Learn more about trading with eToro
| Name | Product | Price per trade | Inactivity fee | Asset Class | International | ||
|---|---|---|---|---|---|---|---|
|
eToro Finder Award |
 |
US$2 |
US$10 per month if there’s been no log-in for 12 months |
ASX shares, Global shares, US shares, ETFs |
Yes |
eToro disclaimer
eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. See PDS and TMD.
This communication is general information and education purposes only and should not be taken as financial product advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial product. It has been prepared without taking your objectives, financial situation or needs into account. Any references to past performance and future indications are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.