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Should I Sell My Investments Now? What UK Investors Should Do During Market Turmoil

If you've opened your investment app recently and felt your stomach drop, you're not alone. The first quarter of 2026 has been bruising for UK investors. The escalation of the Middle East conflict in late February sent oil prices surging, pushed inflation expectations higher, and triggered a sharp sell-off across global stock markets. The FTSE 100, the S&P 500, and most major indices have all taken hits. Bond markets gyrated. Your pension and ISA balances may be meaningfully lower than they were a few months ago.

And now you're asking the question that every investor asks during a downturn: should I just sell before it gets worse?

This guide answers that honestly — drawing on what history, financial research, and current market data actually tell us. The short version: for most UK investors with a time horizon of five years or more, selling now is almost certainly the wrong move. But understanding why is what makes it possible to act on that knowledge when your instincts are pointing the other direction.

What's Actually Happening to Markets Right Now

Before making any decision, it helps to understand what you're looking at.

The trigger for the current volatility was the escalation of conflict in the Middle East in late February 2026. The closure of the Strait of Hormuz — a critical transit route for global oil and gas — sent energy prices sharply higher. Oil moved from around $70 in February to over $100 on average in March. That energy price shock feeds directly into inflation expectations, which in turn changes what financial markets expect central banks to do with interest rates.

Before the conflict, the Bank of England had been widely expected to cut rates twice in 2026. Those expectations have been dramatically revised. Markets are now pricing in the possibility of rate hikes rather than cuts, which hammers both bond prices and the valuation of equities — particularly growth-oriented technology stocks that are more sensitive to interest rate movements.

The result: significant portfolio falls for most investors across March and into April. The S&P 500 has declined roughly 5% since the start of 2026. UK-focused portfolios have seen similar or steeper falls depending on their exposure to energy, financials, and international markets.

A partial ceasefire was announced recently, giving some respite. But as Hargreaves Lansdown noted in their April 2026 investor guidance, the end of the conflict does not mean the end of market volatility — geopolitical risks remain elevated, US trade policy adds further uncertainty, and inflation is still above target.

This is the environment you're investing in. Uncomfortable, yes. Unprecedented, no.

Why Selling During a Downturn Usually Makes Things Worse

The instinct to sell when your portfolio is falling is completely human. It feels like you're stopping the bleeding — taking control before the situation deteriorates further. But the evidence of what actually happens to investors who sell during downturns is consistent and clear: it almost always makes their long-term position worse.

Here's why.

Selling locks in losses that are, at this point, only on paper. A portfolio that was worth £50,000 in January and is now showing £42,500 hasn't actually lost £7,500 — not until you sell. The moment you sell, the paper loss becomes a real one. Markets may recover. If you're no longer invested when they do, you miss that recovery entirely.

The best market days cluster around the worst ones. Research consistently shows that some of the strongest single-day market gains occur in the days and weeks immediately following sharp falls — precisely when investor sentiment is most negative and the temptation to stay in cash is highest. Missing just a handful of those recovery days has a dramatic effect on long-term returns. An investor who missed the 10 best days in the FTSE 100 over a 20-year period would have ended up with a significantly smaller pot than someone who simply stayed invested throughout — including the scary days.

Timing the market is harder than it looks. To successfully sell and reinvest, you need to be right twice: sell near the top, then buy back near the bottom before the recovery. Professional fund managers with teams of analysts and decades of experience consistently fail to do this reliably. The odds of an individual investor threading that needle are poor.

The cost of being wrong is asymmetric. If you stay invested and the market falls further, you experience more paper losses — but they remain paper losses as long as you hold. If you sell, sit in cash, and the market recovers without you, you've locked in a real loss and missed real gains.

Consider a concrete example: an investor with £50,000 who sells after a 20% fall is left with £40,000. If markets then recover 15% before they feel confident reinvesting, they've not only locked in the original £10,000 loss but also missed the early recovery gains entirely. The maths of panic selling is almost always unfavourable.

What History Tells Us About Investing Through Crises

Every generation of investors faces moments that feel uniquely threatening. The key word is feels. The evidence from previous crises is consistent: those who stayed invested came out ahead of those who didn't.

The 2008 Global Financial Crisis saw the FTSE 100 fall roughly 45% from peak to trough. Investors who panic-sold in early 2009 — when the outlook looked bleakest — locked in losses near the bottom. Those who stayed invested saw the index return to its pre-crisis level by 2013 and go on to make new highs. The market recovered. The investors who sold into the panic did not.

The COVID-19 crash of March 2020 was even more dramatic in its speed: both the S&P 500 and FTSE 100 fell roughly 35% in just five weeks. Investors who bought or stayed invested at those lows saw strong returns as markets rebounded — one Motley Fool contributor described the recovery as "life-changing" for those who held their nerve and bought at the lows.

The Russia-Ukraine conflict in 2022 caused a sharp spike in energy prices, contributed to rapid interest rate rises, and produced significant falls in both equity and bond markets. 2022 was an exceptionally difficult year for portfolios. By the end of 2023, most markets had recovered meaningfully.

The FTSE 100 itself, since its creation in 1984, has experienced numerous corrections and several bear markets — yet it has still delivered positive returns for long-term investors over any sufficiently extended period. Downturns are temporary. Their timing and duration are impossible to predict accurately. Markets can turn positive as quickly as they turned negative, often when pessimism seems deepest.

None of this is a guarantee. Past performance is not a guide to future returns. But the historical base rate for "diversified portfolios eventually recover from geopolitical shocks" is very high.

The Exception: When Selling Is the Right Move

This isn't a blanket "never sell" argument. There are genuine situations where reviewing or reducing positions makes sense.

If you need the money within the next one to two years. Investments are appropriate for money you can leave invested for at least five years, ideally longer. If you're approaching retirement imminently, need the funds for a house purchase, or have a known large expense coming up, being exposed to market volatility with that money was always a risk — and now is a reasonable time to review whether your asset allocation matched your actual time horizon.

If your asset allocation was already wrong for your risk tolerance. The best time to discover you can't stomach a 20% portfolio fall is not during one. If this downturn has made you genuinely unable to sleep, that's useful information about your actual risk tolerance — not just your stated one. It may be that your portfolio was too equity-heavy for your circumstances and some rebalancing towards bonds or cash is appropriate. But do this as a considered rebalancing, not a panic-driven full exit.

If individual holdings have fundamentally changed. If you hold specific stocks rather than funds or index trackers, and the business case for a company has materially deteriorated — not just the share price, but the underlying business — then reviewing that position is legitimate. This is different from selling because the broader market is down.

If you have high-interest debt. If you're carrying credit card debt at 25%+ APR, the guaranteed return from clearing that debt exceeds what most market recoveries will deliver in the short term. Review whether maintaining full investment exposure is the right priority given your debt position.

What You Should Actually Do Right Now

If the case for staying invested makes sense intellectually but you're still feeling anxious, here are concrete actions that help most investors in your position.

Stop checking your portfolio daily. This is not a joke. Frequent checking during a downturn produces anxiety without useful information. Your long-term return is determined over years and decades, not by whether the FTSE is up or down on a Tuesday morning. Set a schedule — monthly or quarterly portfolio reviews — and stick to it.

Review your actual time horizon. Open your investment account and remind yourself when this money is for. If it's a pension you won't touch for 20 years, today's volatility is almost completely irrelevant to your final outcome. Reconnecting with your actual goal — not the current market price — is one of the most effective ways to manage the emotional response.

Consider whether you can invest more, not less. This sounds counterintuitive when your portfolio is down, but it's exactly what the evidence supports. Investing regularly through a downturn — a strategy called pound-cost averaging — means you're buying more units of your fund at lower prices. When the market recovers, those cheaper units are worth more. If you have a regular investment standing order, keep it going. If you have cash savings beyond your emergency fund, a falling market is historically a better entry point, not a worse one.

Rebalance if your allocation has drifted. If equities have fallen significantly, your portfolio may now be more heavily weighted to cash or bonds than your target. Rebalancing — trimming better-performing assets and adding to the underperforming ones — sounds emotionally unpleasant but is exactly the discipline that buy-low-sell-high investing requires in practice.

If you have already sold, don't wait for the "perfect" moment to reinvest. Many people who panic-sell then face a second problem: they can't bring themselves to buy back in. The market recovers 5%, and they think "I'll wait for it to fall again." Then it's up 10% and they're paralysed. Fidelity's advice for investors in exactly this position is drip-feeding — investing back in regular tranches over several months rather than a single lump sum. This removes the psychological pressure of picking the "right" day.

Protecting Your Portfolio Going Forward

The current volatility is a useful prompt to review whether your portfolio structure is appropriate for the kind of shocks that global events repeatedly deliver over a long investment career.

Diversification genuinely helps. A portfolio spread across UK equities, international equities, bonds, and possibly property or commodities is less vulnerable to any single shock than one concentrated in a single geography or sector. If your ISA is 100% in a US tech index fund, you have significant concentration risk. A globally diversified index fund — such as Vanguard LifeStrategy or similar options from Fidelity or Hargreaves Lansdown — provides automatic diversification across thousands of companies in dozens of countries.

Defensive holdings provide a cushion. Companies with regulated or predictable earnings — utilities like National Grid, consumer staples like Unilever — tend to fall less sharply during market downturns because their revenues are less sensitive to economic swings. Including some exposure to these sectors doesn't maximise returns in bull markets, but it makes downturns more bearable and reduces the temptation to sell.

Cash buffers matter for those close to retirement. If you're within five years of drawing on your investments, holding one to two years of planned withdrawals in cash or a short-term bond fund means you don't need to sell equity assets at a market low to meet living costs. This is the single most important structural protection for investors approaching retirement.

Review your ISA tax efficiency. The stocks and shares ISA allowance remains at £20,000 for 2026/27. Using your ISA wrapper fully means that any investment growth that happens when markets recover will be completely tax-free. Every pound that sits outside a tax-efficient wrapper is giving the taxman a share of your recovery.

A Note on Your Pension Specifically

If the portfolio you're watching fall is primarily your pension, the framing is slightly different.

For anyone with more than ten years until retirement, your pension falling in value today is almost irrelevant to your eventual retirement income. You are not spending this money now. You are buying units of funds at lower prices — and those units are worth more when prices recover. A 30-year-old watching their pension fall has 30-plus years of market cycles ahead of them. The current downturn is a rounding error in that timeline.

For those within five to ten years of retirement, some caution is warranted — not panic-selling, but ensuring your asset allocation has been gradually shifting towards more defensive positions as you've approached retirement. This is called lifestyling and most workplace pension defaults do it automatically. It is worth checking whether your default fund has been doing this.

For those already in drawdown, the calculus is more complex and the cash buffer strategy described above becomes important. Speaking to an independent financial adviser makes more sense the closer you are to, or already in, retirement.

Frequently Asked Questions

My portfolio is down 15%. Should I sell to stop further losses? Almost certainly not, if your money is invested for the long term. Selling crystallises your paper loss into a real one and means you'll miss the recovery. The 15% fall is painful to look at but is only an actual loss if you sell at this price. History strongly suggests that diversified portfolios recover from geopolitically-driven downturns.

How long will this downturn last? Nobody knows, and anyone claiming certainty should be treated with scepticism. Previous geopolitical shocks — the Gulf War, 9/11, the Russia-Ukraine conflict — caused sharp market falls that recovered within months to a couple of years. The timeline depends on the evolution of the Middle East situation, energy prices, and central bank responses — all of which remain genuinely uncertain.

Should I stop my monthly investment contributions? No. Regular contributions during a downturn are one of the most effective things an ordinary investor can do. You're buying more units at lower prices. When the market recovers, those units are worth more. Stopping your standing order to feel safer in the short term costs you long-term returns.

Is now a good time to start investing? Counterintuitively, yes — if you have a long time horizon and can stomach short-term volatility. Investing when markets are lower rather than higher gives your money more room to grow. The hardest moments to start investing are often, in retrospect, the best ones.

Where can I get independent advice on my portfolio? Unbiased connects you with FCA-regulated independent financial advisers, many of whom offer a free initial consultation. For free, impartial guidance on investing basics, MoneyHelper (the government-backed service) is a strong starting point.

This article is for informational purposes only and does not constitute personal financial advice. Investing involves risk and the value of your investments can go up as well as down. You may get back less than you invested. For advice specific to your personal circumstances, please consult an FCA-regulated financial adviser.