MW Investors say this is 'the toughest investment climate' they've ever experienced

By Gordon Gottsegen

Many investors think investing in this current market is more challenging than the global financial crisis or dot-com crash

Even for investors who have dealt with stock-market crashes in the past, this may be the toughest market yet.

April was a particularly volatile month for the stock market, following the announcement of sweeping new tariffs on April 2. In the days that immediately followed the tariff announcement, the S&P 500 SPX saw some of its most dramatic declines since the COVID-19 pandemic. Then, markets rebounded dramatically when the White House announced a 90-day pause on some tariffs. The Cboe Volatility Index VIX remained above 20 for the entire month, closing as high as 52.33 on April 8.

As markets whipsawed, investors were getting dizzy.

Data-analytics and consumer-intelligence company J.D. Power surveyed 1,190 U.S. investors in mid-April and asked them how they felt about the current stock-market environment as part of its latest Wealth Intelligence Report. J.D. Power provides benchmarking and customer satisfaction surveys to a variety of industries, including the financial-services and wealth-management industries. In the recent investor survey, 56% of respondents said this was "the toughest investment climate" they've experienced.

Michael Foy, managing director of wealth intelligence at J.D. Power, told MarketWatch that all generations surveyed are expressing the same concerns.

Younger investors have likely spent less time investing in the stock market than investors from previous generations, meaning they have less of a time frame to compare the current market to. As such, about two-thirds of Gen Z investors were in the "most challenging" camp.

Gen X investors, born between 1965 and 1976, have invested through turbulent markets such as the dot-com crash in 2000 and the global financial crisis later that decade. But still, 53% of them were uneasy enough to put this at the top of the list.

The current stock-market situation isn't yet as tumultuous as previous market crashes. The peak-to-trough fluctuations of those stock market downturns - as well as the COVID-19 crash in early 2020 - were much larger than the fluctuations seen so far in 2025. During the dot-com crash, the S&P 500 fell as much as 49.1% from its high. In 2025, the S&P 500 briefly traded in bear-market territory - a 20% drop - intraday on April 7, but it exited a bear market that same day. The index only fell 18.9% from its closing high on Feb. 19 to its closing low on April 8, according to Dow Jones Market Data.

Peak uncertainty is giving investors a tough time

According to Foy, that uncertainty comes from the shifting economic policy surrounding tariffs, which is upsetting some, but not others.

"It's not as though everybody thinks this is catastrophic," Foy said. He noted that responses were split between investors who were optimistic and pessimistic about the long-term implications that tariffs would have on their portfolios.

Tariffs could add significant costs to American businesses, or they might not. The tariffs announced in the past few months could be walked back or delayed, or harsher ones may take their place. The uncertainty surrounding the actual economic policies - current or future - makes it difficult for both investors and businesses to adjust accordingly.

Compare that investing environment with a market recovering from a housing-market collapse or tech-sector bust, and some investors may choose the latter option.

"Studies have demonstrated that we prefer certain pain over the uncertainty of not knowing if we're going to be in pain," Naomi Win, behavioral analyst at Orion, told MarketWatch.

To illustrate this point, Win used the example of an employee who would rather get laid off than show up to work with the expectation that they could get laid off any day. It's the metaphorical equivalent of ripping off a Band-Aid quickly or getting the bad news before the good news.

"I would make the argument that the underpinning of all those things that lead to emotional reactions to the market, they're really predicated on a reaction to uncertainty," Win said.

These emotions don't always serve investors. Warren Buffett recently told investors to "check [their emotions] at the door" when investing. The Berkshire Hathaway chief executive also said that the current market volatility "is really nothing" compared with historical stock market swings.

Win recommended that instead of looking beyond the current uncertain times, investors should learn to deal with them by acknowledging what they can and cannot control and building self-trust.

A 'flight to advice' for investors

According to the J.D. Power survey, another way investors are dealing with uncertainty is by turning to professional help with their investments. It's worth noting that J.D. Power serves wealth-advisor clients as part of its customer-intelligence business, so a handful of the survey's questions were geared toward that. However, the company doesn't provide wealth-management services itself; it also works with self-directed brokerage platforms.

Foy said that, among investors who manage their own investments through a self-directed brokerage account, 40% said they would "probably" or "definitely" seek help from a financial advisor over the next 12 months. Foy called this a "flight to advice." Perhaps surprisingly, younger investors were more likely to seek advice according to the survey.

While many millennial and Gen Z investors are digital natives who may be comfortable managing their investments through any of the investing platforms on the market, Foy said that he expected a growing number to turn to financial advisers or "advice-lite" tech solutions such robo advisers. He noted that investors' financial needs change as they get older and their portfolios get larger.

Most active fund managers don't beat the market, but the value of working with an investment professional extends to other things too - from tax optimization, to financial goal setting and the comfort of knowing there's someone to talk to.

"Part of what people are paying for with a financial advisor is peace of mind," Foy said. That peace of mind may be extra valuable when uncertainty is high.

-Gordon Gottsegen

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May 07, 2025 12:52 ET (16:52 GMT)

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