Investing Through Uncertainty
“The stock market is designed to transfer money from the active to the patient.”
You’ve seen the headlines—market selloffs, recession worries, and trade tensions have investors on edge.
But here’s the thing: Market moves like this aren’t new, and they certainly aren’t the end of the story.
So, what’s really happening? And more importantly, what should you do about it?
What's Happening
Economic Uncertainty: Citigroup just downgraded US equities to neutral, citing economic uncertainty. That doesn’t mean we’re heading off a cliff—it means investors are recalibrating their expectations.
Trade Tensions: The US slapped new tariffs on key imports, prompting immediate responses from Canada, Mexico, and China. These moves add short-term volatility and long-term uncertainty (but it’s too early to know for sure how these moves will play out).
Market Roller Coaster: The S&P 500, Nasdaq, and Dow all took hits, with the Nasdaq suffering its worst single-day drop since 2022 on Monday the 10th. Even Magnificent Seven stocks like Tesla and Nvidia were down significantly.
Sure, all this can be scary when you see it dominating the headlines. But what is the bigger picture?
The Big Picture
Market turbulence can feel like a gut punch, but history tells us that patience pays. Take March 2000: The Nasdaq was flying high after a five-year rally, only to drop 60% over the next year. Brutal, right? But investors who stayed the course saw strong recoveries in the years that followed.
Take a look at this sketch. Think about its message.
We Get To Decide What We Focus On
When it comes to investing, that means you have a choice.
Left side: You can tune into the financial networks, go through endless cycles of “buy buy, sell sell,” obsess over the latest financial product, and deal with the apocalypse du jour while cycling through all the emotions that come with it.
OR…
Right side: You can focus on what actually matters when it comes to investing. And that's time. A very long time: decades.
The table below shows standout news events over the past half century.
*Assumes an initial investment of $10,000 in stocks beginning on January 1 of the year in Column 1 through December 31, 2024, reinvestment of dividends and capital gains, and no taxes or transaction costs. Stocks are represented by the S&P 500 Index. For illustrative purposes only. Data Sources: Morningstar and Hartford Funds.
The takeaway? Your investment strategy shouldn’t be dictated by headlines. Disciplined investors who tuned out the noise and stayed invested in stocks were rewarded in the long run.
Action Items
Staying grounded in a well-thought-out strategy is the difference between reacting emotionally and investing wisely.
Stick to your plan. Your investment strategy is built for the long haul, not week-to-week swings.
Look for Opportunities. Volatility creates buying opportunities for long-term investors. If you’re considering adjusting your portfolio, let’s talk about smart, strategic moves.
Market swings are normal, but you don’t have to go through them alone. I’m in this with you, through every market cycle. If you want to talk through anything, just reach out—I’m here to help.
~Alex
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