Don’t Panic And Stay Focused
In your investing lifetime, you will live through several periods of market volatility. These periods may cause you to second-guess your investment strategy or even consider a different approach to managing your money. However, regardless of how the market is currently performing, it’s important to stay focused on your overall approach based on your goals, time horizon, and risk tolerance.
While downturns can be unsettling, it helps to view market activity from a wider perspective. Since 1928, the US economy has weathered 25 bear markets. It also helps to remember that bear markets last, on average, only about 9.6 months. The economy regularly moves through business cycles of recovery and recession. During recovery, understanding whether the economy is at an early or late stage of the cycle may influence certain investment decisions. Conversely, during a recession, deciphering whether the economy is passing through a shallow or deep cycle may be critical.¹
Remember, past performance can’t predict future market results, but having a better understanding of the business cycle can help you stay focused during periods of economic transition.
Professional Perspective: Despite the current market volatility, the best guidance may be the simplest: step back, look at the big picture, and avoid any hasty decisions. The initial reaction to market spikes and sharp drops may be to make a quick exit, but that can be the wrong move. However, we understand that it’s natural to question your investment strategy when the market gets rocky. Here are some insights from the perspective of a financial professional; these steps may help you stay calm and focused.
Turn It Off: Everyone has an opinion, but in the world of modern media, “everyone” is often wrong, or, at best, contradictory. Cable network business news, investment websites, newspaper financial pages, and even social media—the cacophony of opinions and lack of consensus can be overwhelming.
Luckily, you have a financial professional who can conduct in-depth analyses and market monitoring on your behalf. It’s our job to keep you informed of any relevant changes and shifts in the market, so you can tune out all the noise.
Resist the Temptation: Volatility can play rough with your emotions. The temptation to jump ship during a downturn is strong, but timing the market’s trendline is nearly impossible. It rarely maintains a steady upward trajectory, but is rather more like a dance: two steps forward, one step back, over and over again. What may appear to be a peak before a precipice may simply be a brief correction on the way to new highs. When things are bumpy, resist the temptation to react in an emotional way and remember that turbulence is part of the ride.
Look At the Big Picture: Short-term market fluctuations can stir up all sorts of emotions and may even lead you to make unwise investment decisions. Whenever possible, step back and take the long view. Are you investing for 10, 20, or 30 years? Longer? Viable investment strategies generally outlast volatility, which typically lasts days, weeks, or months.
Numbers from the past can provide insight as well. Although past market performance cannot serve as an indicator or predict future trends, it’s worth noting that the Standard & Poor’s 500 (S&P 500) has produced positive returns for 34 of the last 45 years, despite average intra-year drops of 14.1%.²
Take A Deep Breath: In a nutshell, stock markets go up and down. That’s simply their nature. So, what to do when they’re down? Stay calm and take a deep breath. Watching the market too closely— especially when it nosedives or blasts off into the blue skies—can produce unwarranted stress or false exuberance. Attempting to find the exit door or entrance ramp into a jittery market is ill-advised, even for the most studious investor. For the sake of your mental well-being, try to find some ways to de-stress, take a break, and relax as much as possible.
Do Think Twice: At the same time, a volatile market is no reason to stick your head in the sand and ignore your financial picture altogether. Prudence is key to finding investment success. A flexible investment strategy can allow you to take advantage of appropriate opportunities that may arise, provided they are suited to your risk tolerance, time horizon, and personal goals. Connecting with your financial professional can help your money work for you in the long term, regardless of what the markets are doing this week or next.
What’s Next?: Some might say the most interesting part of being an investor is that no one knows the future. Regardless of what’s in store, keep in mind that bouncing trendlines are not necessarily indicators of impending doom or golden opportunities. Rather, they’re simply a typical part of the investing lifecycle. With a sound strategy in place, movement in the market can be anticipated, not feared.
1.FTPortfolios.com, 2025. The Standard & Poor’s 500 is an unmanaged index that is generally considered representative of the U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change, and shares, when sold, may be worth more or less than their original cost. The S&P 500 index was introduced in March 1957, when it was expanded from 90 companies to 500 and renamed the S&P 500 Stock Composite Index.
2.Investopedia.com, December 26, 2024
Election 2026: I’m Just a Bill
Congress moves slowly by design.
How slowly does it move…?
In 1975, Schoolhouse Rock made a short video called “I’m Just a Bill” that looked at Congress and the process of a bill becoming law. In the famous video, the animated Bill says, “Yeah, I’m one of the lucky ones. Most bills never even get this far. I hope they decide to report on me favorably; otherwise, I may die.”
When the 120th Congress begins its first session in January 2027, remember what our old friend Bill said about the congressional process. With committees, floor votes, and often a special conference, it can take months before any new or updated agenda items come into focus. Much longer than headlines might suggest.
So, if you find yourself getting anxious as we get closer to the election, remember the insight from Warren Buffett and his longtime business partner Charlie Munger—the big money is not in the buying and selling, but in the waiting.
Didn’t some famous rock star sing, “The waiting is the hardest part”?