Don’t Just Do Something! Stand There!

It’s hard not to watch the live-action drama unfolding before our eyes. Massive government policy changes seem to be a daily occurrence, the saga of on-again, off-again tariffs continues, severe weather conditions are threatening lives, and global politics aren’t getting any simpler. While I can’t predict exactly what the future holds, my guess is that we’ll see more of what we’re experiencing now: uncertainty and change.

So, you might be asking—what should I do? My answer is that there’s plenty you could do, but maybe the best option is nothing at all. During these times, it’s important to carefully evaluate the types of actions you’re considering. Some are easy to undo and carry little downside, while others are harder to reverse and may have greater consequences.

In the category of actions that are difficult to undo with larger consequences would be making a drastic change in how you’re investing. If you’ve been my client for a while, you know I advocate for making investment decisions based on your goals, needs, and risk tolerance—not on external factors outside your household or beyond your control.

If you were to decide to move to cash or significantly reduce risk in your portfolio, there’s an important follow-up question: When do we get back in? This week was a great reminder that timing the market is nearly impossible. The danger of being out of the market was missing a day when the S&P 500 surged 9.52%, like it did on Wednesday, April 9th. 

Pop quiz!! How many times has the S&P 500 risen by more than 9.52% in a single day? (Cue Jeopardy theme) If you said seven, you’re correct! This has only happened seven times since 1923, when the S&P 500 was created. Some of the largest gains occur right after very scary days. Nobody has consistently demonstrated an ability to time the market perfectly, and this is yet another example illustrating how difficult it really is.

So, what are some productive actions you can take right now? Here are five suggestions:

1. Review Your Asset Allocation

Ensure your portfolio remains diversified and aligned with your risk tolerance and financial goals. If your situation has changed and we haven’t already discussed it, let me know! Market volatility makes reviewing your allocation even more critical—it may also be a good time to rebalance. For most accounts, this has already been done as part of our ongoing investment process. We’ve picked up some cheaper shares for you without you lifting a finger.

2. Tax-Loss Harvesting

Market declines create opportunities to harvest tax losses by selling positions with unrealized losses and reinvesting in similar assets. This strategy can offset gains elsewhere in your portfolio and may reduce taxable income for this year or future years. If you have investments in taxable accounts and are in a higher tax bracket, we are likely already implementing this effective tool.  If this is already set up, then tax-loss harvesting is happening throughout the year.  Consider that box checked off.

3. Opportunistic Investing

If you have excess cash or capital available to invest, market pullbacks often present attractive entry points for long-term investors. It would be a great way to participate in the recovery after significant drops like this one. Consider whether adding to positions aligns with your overall financial plan and long-term goals.  If you're at the correct levels for your cash reserves and don't feel comfortable changing that, then you're already in good shape!

4. Maintain Discipline and Focus on Long-Term Goals

Avoid making reactive decisions based on daily headlines or short-term market movements. Your financial plan already accounts for market fluctuations like these—so trust it! Staying invested and sticking with the strategy is all part of your long-term plan.

5. Review Saving and Spending Habits

Volatile markets can impact cash flow for retirees or those nearing retirement. Consider revisiting your spending priorities and saving strategies:

• Reducing or delaying discretionary expenses may help ease stress on your portfolio.

• If you’re taking monthly withdrawals from investments, consider pausing or reducing them temporarily until markets stabilize.

Let me know if you'd like to discuss adjustments that might help protect your financial security during these times.

Final Thoughts

Part of my job is to keep up-to-date with what’s going on.  I’ve got a pulse on the major changes that are occurring.  Right now, there’s a lot of talk, but what I’m paying attention to is when things actually change and become new laws or updates to older laws.  This means you do not need to read every single article that is speculating about what might come.  That pretty easily slides you into over consumption of the news. When societal and law changes affect you, I will definitely let you know.  So again, hang back and don’t do anything just yet.

As you can see, many of the actions that you should be taking might simply be doing nothing to stay on your current trajectory.  Just because we encounter a detour doesn’t mean we should stop driving the car or turn around if we want to reach our destination.  By working together, I am able to take care of the investment management in the background.  You just have to manage the rest of your well-being.  So sometimes it’s really better to just stand there and do nothing if everything else has already been taken care of for you.