2025 was a strong year for the FTSE 100, the index of the 100 largest companies listed on the London Stock Exchange, rising 21.5% – its best annual performance since 2009 – and going on to cross 10,000 points for the first time when markets reopened in January 2026. If that had been the whole story, it would already be a useful reminder of what patient, long-term investing can look like. But 2026 itself has turned out to be the better teacher, because of what happened only a couple of months later.
1. Look beyond the headlines
By March 2026, the FTSE 100 had slipped around 10% from its recent high, tipping into what’s technically classed as a correction. The headlines at the time pointed to a cluster of concerns arriving at once: rising geopolitical tension in the Middle East and disruption around the Strait of Hormuz pushing oil prices up, inflation worries as fuel and transport costs rose, the Bank of England delaying interest rate cuts many had been hoping for, and fresh US tariffs on cars and other imports. Individually or together, this was exactly the kind of sustained, sensational coverage that tends to unsettle investors and tempt some into selling.
Anyone who acted on that mood in March, rather than looking past the headlines to their own long-term strategy, would have missed what came next. None of this is to say the concerns behind those headlines weren’t real – geopolitical risk, inflation and trade tensions are genuine factors that can and do affect markets. It’s simply that reacting to the headline in the moment, rather than checking it against your own long-term strategy first, is where investors tend to come unstuck.
2. Markets typically recover from downturns
Four months after that 10% correction, the FTSE 100 reached a new all-time high of 10,991 points in July 2026. As of this September, the index sits around 10,817 – still close to that record, and up roughly 17% compared with the same time last year. None of this means every downturn resolves this quickly, or that future performance is guaranteed – it isn’t – but it’s a genuinely current illustration of a pattern that’s held up repeatedly over time: markets that fall don’t necessarily stay down, and reacting to a correction in the moment can mean missing the recovery that follows it.
If you’re tempted to act on a period of market volatility, this year’s swing from a 10% correction to a fresh all-time high within months is worth holding in mind before making any decision.
3. Diversification helps manage the volatility, even within one index
The FTSE 100’s swings this year also make the case for spreading your investments, rather than concentrating them in a handful of companies or one part of the market. Even within the index itself, performance varies a great deal by sector – energy shares have had support from higher oil prices this year, for instance, while some consumer-facing companies have struggled – so a downturn in one part of your portfolio doesn’t have to mean a downturn across all of it.
It’s also worth knowing that the FTSE 100, despite being tied to the London Stock Exchange, is far less “UK-only” than its name suggests. Analysis from LSEG found that more than four-fifths of FTSE 100 companies’ sales come from outside the UK, meaning your investment is really exposed to a broad, global mix of economies rather than the UK economy alone. Investing through a fund is one straightforward way to get this kind of spread across companies, sectors and regions without having to make each individual investment decision yourself – your financial planner can help you work out which funds, if any, suit your circumstances.
Let’s talk about what this means for your portfolio
As financial planners based in Poole, we help clients across Bournemouth and the wider Dorset area review their investment strategy and make sense of a year like this one, rather than reacting to it in isolation. If you’d like to talk through how your investments are positioned, we’re always happy to have a no-obligation conversation.
Get in touch if you’d like to review your investment strategy in light of this year’s market moves.
This article is for general information only and does not constitute advice. The information is aimed at individuals only. All information is correct at the time of writing (September 2026) and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.