Staying the Course: Why Rash Decisions in Market Turmoil Can Hurt Your Future

The markets are experiencing a rough patch, and it’s natural to feel uneasy. When headlines are filled with uncertainty and portfolios show short-term declines, the instinct might be to act – move to cash, make drastic changes, or even abandon the carefully designed plan we’ve built together.

But before making any hasty decisions, it’s important to remember why your portfolio is structured the way it is and how your income remains protected, even in turbulent times.

Your Income Is Secure—It’s Not in the Stock Market

If you’re drawing an income from your portfolio, rest assured, it’s not coming from stock market investments. Instead, we’ve structured a dedicated Liquidity Portfolio to shield you from short-term market swings.

This Liquidity Portfolio consists of:

• 30% in cash, providing immediate access to funds.
• 70% in short-term bonds, offering stability and steady returns.

Together, these assets are designed to cover approximately five years of income needs, allowing us to avoid selling growth investments at depressed prices during market downturns.

Volatility Is Expected and Accounted For

The portion of your portfolio allocated to long-term growth—what we call the Longevity Portfolio—will naturally experience more volatility. That’s the price we pay for the potential of higher long-term returns. However, by maintaining a Liquidity Portfolio, we give your Longevity Portfolio time to recover before you need to access it.

It’s also important to keep perspective. The recent market pullback has erased the gains made since September 2024, effectively giving up what some call the “Trump Effect.” While short-term market movements can feel unsettling, history has shown us time and time again that markets tend to recover – often in a sharp, elastic-band fashion, where the steeper the decline, the stronger the rebound.

Stick to the Plan – It’s Built for Times Like These

2025 marks my 30th year in this profession—and probably 35 years of investing! I’ve seen far worse periods before:

• 2000 (Dotcom crash)
• 2008 (Financial crisis)
• 2020 (Pandemic-driven market collapse)

Each time, markets recovered, and those who stayed the course always came out ahead. From experience, the clients who “ride it out” and make no changes are the ones who ultimately do best.

I know that doing nothing can feel like the hardest decision, but that’s exactly why we’re here – to guide you through uncertain times and keep you on track toward your long-term goals.

Final Thought: Stay Focused on the Bigger Picture

The key takeaway? Don’t let short-term fear drive long-term decisions. Your portfolio is designed to weather storms like this, ensuring your income remains secure and allowing your long-term investments the time they need to recover and grow.

As always, if you have any concerns or would like to discuss your portfolio in more detail, please feel free to reach out. We’re here to help.