When markets fall, headlines howl. A red day on the FTSE or S&P500 and suddenly the front pages are predicting financial Armageddon. Fear grabs attention, and the media knows it. But while the headlines shout about billions “wiped out,” history quietly shows something very different: crashes recover, often faster than anyone expects, and rarely with the same dramatic fonts.
If it bleeds, it leads – and in financial news, if it plummets, it practically screams. UK media outlets have never been shy about splashing dramatic headlines during market turmoil. Major political upsets, economic policy blunders, or global pandemics tend to produce front pages that read like the end of days for investors.
These attention-grabbing headlines play on our anxieties in real time, even when subsequent events prove the panic was short-lived. It’s not that the news is wrong, markets really do fall during crises, but the breathless tone can make temporary declines feel like permanent doom.
For long-term investors, it’s critical (and admittedly contrarian) to remember that markets have a habit of recovering quietly while the headlines are still loudly forecasting disaster.
When the UK voted to leave the EU in June 2016, the immediate media reaction was apocalyptic. The Guardian ran the headline “FTSE 100 and sterling plummet on Brexit vote” as markets sold off in shock. The pound hit a 31-year low overnight, and £85 billion was wiped off UK blue-chip stocks within days. Tabloids coined terms like “Brexageddon” to capture the panic.
Yet the enduring story of Brexit and markets is far less grim. In fact, after that initial 8% plunge on referendum day, the FTSE 100 staged a recovery within days – by 1 July it was above its pre-vote level, marking its largest single-week rise since 2011. By mid-July 2016, the index was over 20% higher than its February 2016 low, entering a new bull market, and in the three years following the vote, UK shares as a whole rose about 28% according to schroders.com, despite all the gloomy predictions.
The sensational headlines of June 2016 were literally true (markets did plummet), but they weren’t the whole truth. Lost in the noise was the fact that disciplined investors who stayed the course saw UK stocks regain and even surpass their pre-Brexit values in short order.
The Brexit sell-off was loud, but the recovery was fast - a reminder that headlines panic instantly while markets often repair quietly.
Nothing sells papers like a proper market meltdown, and the global financial crisis gave the British press plenty of fodder. As the credit crunch intensified in October 2008, one Guardian piece described “panic selling” sending shares into “freefall” during what analysts dubbed “the great crash of 2008”.
On 10 October 2008, the FTSE 100 fell nearly 9% in a day, its worst drop since the 1987 crash. The article noted £89.5 billion wiped off Britain’s biggest companies in a single session and veteran traders called the day a “bloodbath” born of “pure blind panic. Such language was hardly exaggeration – and in isolation, it truly was a frightening moment. But fast-forward a bit: global markets bottomed out in early 2009 and then began one of the longest bull runs in history.
An investor reading only the 2008 headlines might have wanted to bury cash in the garden; an investor looking at the long-term trend saw an opportunity. Indeed, someone who bought a world index fund at the depth of the crisis and held on would have enjoyed well over a decade of growth afterward. The media’s focus was on the crash, with far less fanfare when the recovery quietly kicked in. Bad news made the front page, while the subsequent record highs (reached a few years later) received far fewer column inches.
The 2008 crash was terrifying in real time, yet those who held their nerve caught more than a decade of growth that the headlines never bothered to celebrate.
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In March 2020, as the COVID-19 pandemic spread, markets worldwide went into free-fall, and the press into full panic mode. “Black Monday” comparisons dominated the news when, on 12 March 2020, the FTSE 100 plunged 10.9%, its worst one-day drop since the 1987 crash.
BBC News plainly declared: “FTSE 100, Dow, S&P 500 in worst day since 1987”, reporting that the UK’s main index had lost over 10% in a single day. The Guardian and others chronicled the “historic losses” and “markets in turmoil” as economies shut down. It was hard to find any silver lining in headlines during those frenetic weeks – even typically staid outlets used words like “plunge”, “cratered”, and “free fall”. But once again, what followed those scary headlines was one of the fastest market rebounds ever recorded.
Massive fiscal and monetary intervention, combined with investor optimism about eventual recovery, propelled global equities upward long before the news headlines turned positive. By the end of 2020, many stock indices had erased a large chunk of their losses. In the ensuing years, markets not only recovered but soared: the S&P 500 in the US, for instance, doubled from its pandemic lows by late 2021.
The UK’s FTSE 100 was a bit slower to bounce back, but it did claw its way up and by early 2023 was regularly flirting with all-time highs. The irony is rich – while front pages in 2020 were filled with dire pronouncements of a new Great Depression, a patient investor who didn’t panic was well-positioned to profit from the eventual upswing.
COVID headlines screamed collapse, but markets staged one of the fastest rebounds on record proving again that fear moves quicker than facts.
It’s often said that “markets climb a wall of worry.” In plain terms, despite a constant backdrop of alarming headlines, global markets have historically trended upward over the long run. The problem is that bad news gets the banner headlines, whereas recoveries are often treated as back-page news or a footnote.
A record high in the FTSE or S&P might get a brief mention, but it rarely commands the inch-high font of a crash or crisis. This media bias toward negativity isn’t a grand conspiracy; it’s the simple reality that fear and drama draw eyeballs. But for investors, it poses a challenge: tuning out the noise when the noise is blaring 24/7.
The historical episodes above – Brexit, the 2008 crash, COVID, the 2022 mini-budget – all taught the same lesson: short-term panic can be a long-term investor’s friend (if handled with discipline). Those who sold in fear during the Brexit vote missed out on the rapid rebound that followed. Those who went to cash in early 2020 locked in losses while others rode the rocket back up in late 2020 and 2021.
And those who dumped UK assets at the height of the mini-budget chaos would have been doing so right before UK stocks surged to new heights a few months later. Time and again, staying invested through the turmoil – or even adding to one’s portfolio when prices are cheap – has been rewarded once the storm passes.
Why We Panic - and How to Resist It
Humans are wired to feel losses twice as strongly as gains. That’s why scary headlines hit harder than good news. Successful investors recognise this bias and structure their portfolios (and habits) to protect against it.
For globally minded investors (like many expatriates, HNWIs, and other seasoned market players), the takeaway is clear: context is everything. Sensational media coverage can make every downturn feel like a once-in-a-lifetime catastrophe. But if you zoom out, most of these events are bumps on a long upward road. None of this is to say that bad news should be ignored or that risks aren’t real. Markets do occasionally undergo severe corrections, and not every recovery is instant or guaranteed. However, history shows that betting against human progress – which is essentially what a permanent bear stance amounts to – has been a losing proposition. The world economy endured world wars, depressions, oil shocks, and yes, pandemics, and the long-term trajectory of well-diversified equity portfolios has still been upward.
The next time you see a screaming headline about billions wiped off markets or some “crisis” trending on social media, remember how these same stories played out in the past. The cacophony of bad news will always drown out the quiet good news of recovery.
As an investor, your job is to maintain that long-term discipline and discern signal from noise. Or put more cheekily: when the tabloids are shouting “Sell, sell, sell!”, it might be time to check if your favourite quality stocks are on sale. Stay informed, by all means – just don’t let sensational headlines dictate sound investment strategy.
In the end, patience and perspective are the real superpowers in finance. Over decades, markets have rewarded those who keep calm and carry on investing, while panic has rarely paid off. And that’s something you won’t likely see in tomorrow’s headlines – but it’s well worth remembering when everyone else forgets.
With a career built on delivering the highest standards of financial advice and a passion for developing others to do the same, Tom Pewtress is a senior leader at Skybound Wealth Management. Known for his deep technical expertise and hands-on experience across global markets, Tom ensures both clients and advisers are equipped with the knowledge, tools, and strategies to succeed, no matter how complex the situation.
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