Should I pull my money out of the stock market? Pros & cons of staying invested

When markets get volatile, even experienced investors start to question their next move. Should you stay the course? Pull out now? The motivation to protect what you’ve built is understandable, but acting on instinct in a turbulent moment can unintentionally derail your long-term goals.

So far in 2026, the market has been anything but steady. Between ongoing global unrest, recent declines in the S&P 500 and questions about how AI will reshape earnings and industries, investors are facing a steady stream of uncertainty. Add in mixed economic signals, like a softening labor market alongside resilient consumer spending, and it’s easy to see why confidence has been shaky.

But for most investors, pulling out of the stock market right now will do more harm than good. Volatility like this is uncomfortable, but it’s also normal, and reacting to it by exiting the market can mean locking in losses and missing the recovery that often follows. Even in today’s environment, staying invested and focused on the long term remains the more reliable path forward.

“While it may not have seemed like it, volatility was pretty low in the second half of 2025. But I don't think that will necessarily continue,” says David Royal, executive vice president and chief financial & investment officer at Thrivent. “The best way to prepare for volatility is to expect it.”

Instead of letting fear drive your next step, pause and look at the bigger picture. Consider the full range of risks, both of staying invested and of exiting the market earlier than intended, before deciding what’s best for your financial plan.

One of the most time-tested principles of successful investing is the idea that time in the market beats timing the market. This phrase speaks to the difficulty—some would say impossibility—of consistently predicting when the market will rise or fall. Even seasoned professionals rarely get it right 100 percent of the time. The challenge is twofold: Not only do you have to decide when to get out, but you also need to know when to get back in.

Missing just a few of the market's best days can have a dramatic impact on your overall return. For example, over a 20-year period, being out of the market for the top 10 performing days could cut your total returns in half. So, while pulling your money out of the market may help you avoid short-term losses, it also carries the risk of missing the rebound. History has shown that some of the strongest market gains often follow on the heels of steep declines, meaning that timing the market by hastily selling your investments could cause more harm than good.

If selling your investments seems like a good idea, you may be planning to “sit it out” in cash until things feel safer. While cash does provide stability in the short term, it comes with an often-overlooked drawback: opportunity cost. Cash typically earns very little return, especially after factoring in inflation. Over time, this erosion of purchasing power can be significant.

For example, inflation averages about 3% per year, which means money sitting in a non-interest-bearing account is steadily losing purchasing power. Even with today’s relatively attractive high-yield savings rates of around 4% to 4.5%,you’re only staying modestly ahead, and that’s before taxes, which can eat into those gains and leave you barely keeping pace with inflation in real terms.

Meanwhile, a well-diversified investment portfolio, despite some ups and downs, has historically outpaced inflation and generated growth. By holding on to too much in cash, you might miss the opportunity for your money to grow in line with your long-term financial goals, like retirement savings.

So, while holding cash may feel like a safe move in volatile times, it's important to recognize that avoiding short-term losses could come at the expense of long-term gains.

Remaining invested, even during rocky times, can be one of the most effective ways to build your wealth over time. This strategy allows you to benefit from compounding, where your investments generate their own earnings. The longer you're invested, the more compounding works in your favor. But compounding requires consistency. Interruptions, like pulling out of the stock market, disrupt its potential.

Additionally, the stock market has a strong historical track record of recovery. While no one can guarantee future results, past bear markets historically have been followed by bull markets, often when investors least expect it. Staying the course keeps you positioned to participate in those rebounds. And if you're regularly contributing to your portfolio during downturns, you're essentially buying shares at a discount—another benefit that can pay off when the market eventually rises.

Long-term investing means staying the course. A single year of losses doesn't define your portfolio's future. In fact, those who remained invested through past downturns, like the 2008 financial crisis or the early 2020 COVID shock, often were rewarded for their patience in the years that followed.

Market uncertainty doesn’t always call for a big move, but it can be a good catalyst for evaluating your strategy. Here are some ways to revisit your approach and make thoughtful adjustments.

It’s tempting to watch your portfolio every day, especially when markets are jumpy. But those daily swings are mostly noise. The more you check, the more likely you are to react emotionally. Take a step back. Your plan should be built for the long term.

Instead of pulling money out, use this as a chance to realign your portfolio. If one area has dropped or another has held up better, a quick rebalance can get things back in sync with your original strategy.

If you’re still contributing, downturns aren’t all bad. You’re essentially buying at lower prices, which can pay off over time. That’s the idea behind dollar-cost averaging. It smooths out the ups and downs.

Having cash set aside matters more in volatile markets. A solid emergency fund means you won’t have to dip into investments when you need money quickly, which makes it easier to stay invested through the rough patches.

If you’re feeling unsure, that’s normal. But before making any major moves, it’s worth talking to a financial advisor. A second opinion can help you avoid decisions you might regret later and keep you focused on the bigger picture.

Decide where to keep your cash holdings

Read more on managing cash reserves in a shifting rate environment:

Cost of cash

If you’re getting close to retirement, or already there, the focus shifts from chasing big gains to keeping your income steady and managing risk.

One thing to watch out for is sequence-of-returns risk. If the market drops just as you’re making withdrawals, it can do considerable damage to your portfolio. That’s why it’s important not to be forced to sell stocks at the worst possible time.

A helpful approach is the bucket strategy. Think of keeping a few years’ worth of living expenses in cash or short-term, stable investments, a few more years in bonds or income-generating assets and the rest in equities for growth. That way, your investments have time to bounce back without derailing your withdrawals.

It is generally prudent to gradually reduce your exposure to stocks as you approach retirement—but not out of panic. Selling during a downturn locks in losses and defeats the point of your strategy. Instead, rebalance gradually, keeping your allocation aligned with your income needs, your timeline and how many market ups and downs you’re comfortable with.

The goal isn’t to avoid all risk; it’s to make sure your money can support you no matter what the market does.

The question “Should I pull my money out of the stock market?” deserves careful thought, especially in uncertain times. While the fear of loss is natural, reacting emotionally can jeopardize the goals you've been working toward.

Markets are unpredictable in the short term, but they've been resilient over time. As uncertainty rises, staying aligned with your long-term strategy becomes both more difficult and more important.

Remember:

• Successfully timing the market is incredibly difficult, and missing even a few key up days can drastically reduce your returns.
• Holding cash may feel safe, but inflation can quietly chip away at your purchasing power.
• Staying invested allows for compounding to work, positioning you for potential recovery and growth.

“Volatility can present some opportunities as well,” says Royal. “I like to remind folks that it can be helpful to speak with your financial advisor more frequently during periods of volatility, because that’s when it's easiest to stray from your long-term asset allocation plan.”

Rather than making a quick decision in a moment of anxiety, consider speaking with someone who can help you evaluate your options through an objective lens. Work with a Thrivent financial advisor to assess your unique situation, update your investment strategy and feel more confident in your financial journey, no matter what's happening in the markets.