As you’ve likely seen in the headlines, we’re experiencing significant market volatility, with the largest sell-off since the COVID-19 pandemic of 2020.
First and foremost, I want to assure you: This is why we plan the way we do.
What’s Happening in the Markets
The markets are responding to several factors:
- The recent tariff announcements from the Trump administration
- Ongoing inflation concerns
- General economic uncertainty
- Heightened investor anxiety
While these headlines can be concerning, it’s important to remember that market volatility is normal and expected. In fact, it’s precisely these moments that our investment strategy is designed to weather.
Why Your Financial Plan Remains Solid
I want to remind you of a few key principles that form the foundation of our approach:
- Volatility is built into your plan. The financial plan we created together already accounts for market fluctuations—even significant ones. These market movements are not outside our planning parameters.
- We’re playing the long game. History has consistently shown that those who maintain discipline during market turbulence benefit in the long run. Since 1929, the S&P 500 has experienced 26 market corrections of 10% or more, yet has delivered average annual returns of approximately 10% over the long term.
- We aren’t invested solely in what’s making the headlines. Your portfolio is not only invested in the S&P 500, which is often the focus of the headlines. Our Betterment portfolios include a variety of different asset classes including bonds, international stocks, US small cap stocks, and emerging markets, and that diversification can reduce the volatility of your portfolio.
- Media headlines are designed for clicks, not calm. Financial news outlets thrive on dramatic stories. Their incentive is to capture attention, not to provide balanced investment guidance. Remember that market commentary often emphasizes short-term disruption over a long-term perspective.
What We’re Doing
Rather than reacting to headlines, we’re:
- Monitoring your portfolio allocation to ensure it remains aligned with your long-term goals
- Looking for potential opportunities that market volatility may present
- Standing ready to make measured adjustments if truly warranted by fundamental changes—not emotional reactions
What You Should Do
The most important thing you can do right now is to maintain perspective:
- Avoid checking your investment balances daily
- Remember that paper losses only become real losses when investments are sold
- Focus on the time horizon of your financial goals, which likely extend well beyond the current news cycle
- Reach out to me if you have concerns before making any changes to your investment strategy
As always, I’m here to discuss any questions or concerns you may have. Sometimes, the most valuable service I can provide is helping our clients maintain discipline when markets test our collective resolve.
