In recent weeks, U.S. stock market volatility has spiked to levels only reached during the early stage of the COVID-19 pandemic (Spring 2020) and the global financial crisis (2008-2009). This heightened volatility reflects investor reactions to rapidly changing political and economic developments concerning trade policy and Federal Reserve independence.
Watching stock prices fall is an uncomfortable experience for investors no matter the circumstances under which it occurs. It can feel uncontrollable and make us feel powerless over something so incredibly important to our futures. It’s perfectly reasonable to dislike that experience. As I’m checking in with my clients, I want to hear how they are feeling right now. No matter what emotions you are experiencing, it’s healthy to share that experience and maybe to get another perspective. There is some common wisdom which circulates widely in times like these, “just don’t look.” That can certainly be good advice for the right kind of person, but it might not work for everyone. Sometimes having something to do can help us feel a sense of agency in turbulent times and alleviate some discomfort. With that in mind, I want to share with you my list of action items for periods of market volatility. Hopefully, you will find a tip or two to help you feel empowered.
We’ve spoken with so many clients who are feeling completely uneasy about recent market volatility and the political landscape, and for good reason of course. So many of you have weathered market storms before, but as I said in last week’s Insights piece, it’s one of those things that unfortunately doesn’t get any easier just because you have past experience with it. We empathize with the angst and uncertainty you’ve likely felt the past month but of course particularly over the last two days regarding tariffs—and more than empathy, we feel this weight on your behalf.
If my kids were old enough to read this newsletter, they’d say “Mom, all you do is lecture people, including us.” Good thing for me, they aren’t there yet. But alas, I hope you wouldn’t agree with their presumed sentiment. The reality is that as advisors to our many, many cherished clients over decades, we believe we pick up on themes to which individuals wouldn’t otherwise be privy.
One of the greatest joys of being a financial advisor isn’t watching a client’s portfolio grow or seeing a technical piece of a financial action plan come to fruition—it’s witnessing clients spend their money on things that bring them true joy.
“What should I spend my money on in retirement?” I received this question from a client a few weeks ago and it really made me pause to think. I’ve fielded countless questions like “how much can I spend in retirement?” and “how long until I can retire?” but never what should I spend money on?
First, I believe we should have immense gratitude for living in this country at this point in history. Second, I’m left questioning that with the ease of procuring almost anything we desire, has there been something deeper that’s been left out?
Over the last couple of months, the markets and investors have been concerned about numerous policy decisions that a Trump administration would impose. One of these concerns that continues to be front and center are tariffs. What exactly are tariffs? Simply put, these are taxes imposed by one country on the goods or services imported from another. Tariffs can be used to influence another country, raise money or to protect a competitive advantage.
Behavioral biases can turn even the most rational individuals into irrational decision-makers. These biases are tricky to quantify and hard to spot, making them especially dangerous. Uncover two of the most common biases that can undermine your financial success and learn strategies to overcome them.
When reflecting on the year just past, I thought I would go back and check on the market predictions from the end of 2023. Where did the smart people think we would end up at the end of 2024 and what were the boldest predictions that did not come true? One phenomenon I have noticed over the many years I have done this is that most short-term predictions are wrong. And there is usually no consequence for getting the predictions wrong no matter how bold—no jobs are lost and, in fact, the predictions that are wrong are mostly forgotten. However, the upside to making a bold prediction and being right is immense.
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