Client Affairs
Investors Face Emotional Rollercoaster As Volatility Surges – Oxford Risk

Behavioural finance experts Oxford Risk discuss how the perfect storm of volatility could blow long-term financial plans off course if investors overreact. It says that knee-jerk reactions to market swings cost investors around 3 per cent a year in returns and could soar in 2025.
Investors face an emotional rollercoaster in the year ahead as stock market volatility surges, driven by a combination of policy changes from US president Donald Trump’s administration and the removal of fact-checking on social media sites, according to behavioural finance experts, Oxford Risk.
Oxford Risk applies behavioural finance expertise and technology to help its clients deliver advice and service more efficiently.
Its analysis shows that knee-jerk emotional reactions to market swings cost investors an average of 3 per cent each year in returns; it predicts that losses could soar this year as a perfect storm of volatility drives investors to make mistakes and invest in assets which they may not even understand.
Oxford Risk believes that behaviourally-driven financial advice software can help investors and advisors avoid making emotional mistakes. It said that without these solutions in place, investors are likely to experience an emotional rollercoaster resulting in bad decision-making and poor financial outcomes.
Analysts are predicting high levels of volatility with markets “expected to focus more on actual events and announced policy than speculation on social media.” Added to this, the expected introduction of trade tariffs and other policy announcements from US president Donald Trump’s administration, global inflation, recession worries, and interest rate decisions by central banks are major concerns.
Social media speculation will become a greater concern, Oxford Risk believes. Scrapping fact-checking by Meta on its Facebook, Instagram, and Threads sites in the US, in line with similar policies on X, will lead to a rise in misinformation and disinformation about investment. (The firm's comments came a few days prior to the US Big Tech stock selloff yesterday amid revelations that China's DeepSeek AI app had been released and which is said to have cost less to develop than Western counterparts. The development slammed equity prices of firms such as Nvidia and Microsoft.)
Boosting cryptocurrencies and digital assets by the new US administration, which is expected to loosen regulation, will help set people up for an emotional rollercoaster in the year ahead as more investors are attracted to trading bitcoin and other cryptocurrencies despite many not understanding the risks, the firm added.
Mistakes that are made
Typical investing mistakes which retail investors
make – such as chasing
current and popular themes and trading stocks too
much – are more likely as
volatility rises throughout the year, Oxford Risk
said.
The firm believes that advisors and wealth managers can play a significant role in helping investors avoid this emotional rollercoaster, but advisors need better technology to deliver more personalised support for clients during heightened volatility, it said.
“Volatility is part of investing and people need to be able to tune out the noise, focus on their long-term financial plans and not rush to buy or sell. But the reality is many are not able to do so when markets are more unstable,” James Pereira-Stubbs, chief client officer at Oxford Risk, said,
“It is going to be increasingly difficult in the year ahead with a real risk to investors as markets swing wildly in reaction to major policy changes from the Trump administration, while issues such as inflation and interest rates remain uncertain,” he added.
“The end of fact-checking social media in the US will add to volatility with people tempted to invest in the latest fads and a greater focus on cryptocurrency and digital assets. Advisors can address these issues for clients but they need technology support so they can provide hyper-personalised engagement that helps people get invested, stay invested, and make better decisions throughout their journey. By addressing individual needs and behaviours, financial firms can turn missed opportunities into better outcomes for investors,” Pereira-Stubbs continued.
Oxford Risk said it’s white paper, Behavioural Engagement Technology: Using technology to understand, map, and improve engagement in personal finance outlines how using AI and machine learning to engage investors can improve financial outcomes and grow assets under management for advisors by 10 per cent or more.
Guides available on Oxford Risk’s website for financial advisors and wealth managers outline how using technology and behavioural science enables firms to tailor services more efficiently whilst communicating with clients more effectively.
The company, which develops software to help financial services firms support clients in managing complexity, uncertainty, and behavioural biases, has created proprietary algorithms that rank products, communications, and interventions based on their suitability for each client at any given time.
Founded in 2002 by decision science academics from Oxford University, Oxford Risk's team are experts in behavioural finance and financial wellbeing. They look at how people perceive risk, make judgments about risk, and behave in risky situations.