Share market investors often carry vivid memories of major trading events.

Take last month, for instance. It marked five years since the 2020 COVID crash, when global share markets plunged more than 35% in just a few weeks—a moment still etched in many investors' minds.

For others, though, the COVID crash has faded into distant memory. Five years is a long time in investment terms.

Since then, the Australian share market—measured by the S&P/ASX 300 Index—has surged more than 80% from its low of 4,359.60 on 23 March 2020. The U.S. market has fared even better, with the S&P 500 Index more than doubling over the same period.

So what can we learn from this fading memory, especially as 2025 brings fresh waves of market volatility?

Here are six timeless investing lessons:

Stay invested for the long term
Investors who resisted the urge to sell during the 2020 crash and stayed the course were rewarded as markets rebounded rapidly. This underscores the value of long-term thinking over reactive decision-making.
Always have a plan
A clear investment plan acts as a safeguard during uncertainty. Without one, investors are more likely to chase performance, time the market, or react to noise—especially in downturns.
Stock markets are not the economy
Even amid a severe economic slump in 2020, share markets staged one of the fastest recoveries in history. Markets anticipate future outcomes more than they reflect current realities.
Diversification is crucial
During the COVID crash, asset classes and sectors performed unevenly. Investors with diversified portfolios were better insulated from losses compared to those heavily concentrated in specific sectors.
Share markets recover
Though shares are more volatile than many asset classes, they have historically delivered strong long-term returns. The Vanguard Index Chart over the past 30 years illustrates this resilience—even if past performance isn’t a guarantee of future outcomes.
Emergency funds are essential
The sudden shock of the pandemic highlighted the importance of having a cash buffer. Emergency funds allow investors to cover expenses without selling investments during downturns.

By embracing these lessons, investors can navigate future volatility with greater confidence and resilience.

Rick Maggi, Financial Advisor Perth, Westmount Financial