How To Handle Market Volatility In Investment Accounts

Market corrections and bear markets can be stressful—especially if you're in or approaching retirement. But protecting your assets isn’t about guessing when the market will drop; it’s about having a solid plan in place ahead of time. Here’s how: 1️⃣ Maintain a Diversified Portfolio Spread risk across stocks, bonds, and cash so that a downturn in one area doesn’t derail your entire retirement plan. 2️⃣ Keep a Cash Reserve Set aside 12 to 24 months' worth of living expenses in cash or short-term bonds to avoid selling investments at a loss when markets dip. 3️⃣ Use a Bucket Strategy Think of your retirement savings in buckets: • Short-term (1-3 years): Cash & conservative investments for immediate expenses. • Mid-term (3-7 years): Bonds & income-focused assets for stability. • Long-term (7+ years): Stocks for growth to outpace inflation. This strategy helps you avoid selling stocks during downturns. 4️⃣ Adjust Your Withdrawal Strategy Rather than withdrawing a fixed percentage each year, consider a flexible approach—draw from cash or bonds during downturns and let your stocks recover before tapping into them. 5️⃣ Rebalance When Needed Regularly rebalancing your portfolio keeps your asset allocation in check, controlling risk and aligning with your long-term goals. 6️⃣ Avoid Emotional Decisions Panic selling locks in losses. History shows markets recover, so sticking to your plan is key to long-term success. A market downturn doesn’t have to derail your retirement. With the right strategy, you can stay protected and confident no matter what the market does. Let's connect if you want to ensure your retirement plan is built to withstand volatility. Follow for more tips on simplifying your finances to maximizing your retirement! #Personal Finance #FinancialLiteracy #RetirementPlanning

One of the most concerning developments is the growing divergence between professional and retail investors. Institutional investors have quietly reduced risk, shifting toward defensive sectors and fixed income, while retail traders continue chasing speculative trades. Sentiment surveys confirm this imbalance, showing extreme bullishness among small traders, especially in options markets. With these risks building under the surface, prudent investors should proactively protect their portfolios. No one can predict precisely when the market will correct, but the ingredients for a sharp downturn are clearly in place. Savvy investors should use this period of complacency to reduce risk exposure before the cycle turns. Here are six practical steps investors should consider: ▪️ Rebalancing portfolios to reduce overweight exposure to technology and speculative growth names. ▪️ Increasing cash allocations to provide flexibility during periods of volatility. ▪️ Rotating into more defensive sectors like healthcare, consumer staples, and utilities that tend to outperform during corrections. ▪️ Reducing exposure to leverage by avoiding margin debt and leveraged ETFs. ▪️ Using options prudently—not for gambling, but for protecting portfolios through longer-dated puts on broad market indexes. ▪️ Focusing on companies with strong balance sheets, stable earnings, and reasonable valuations. ▪️ The explosion of zero-day options trading is not a sign of a healthy market. It is a symptom of an unhealthy market increasingly driven by speculation rather than investment discipline. Retail traders have moved from investing to gambling, chasing fast profits while ignoring the mounting risks. Greed is rampant, leverage is extreme, and complacency is near record levels. Markets can remain irrational longer than expected, but history tells us these speculative periods always end in a painful correction. Bull markets do not die quietly; they end with euphoric retail excess followed by painful corrections. Investors who recognize the signs early will avoid the worst of the fallout and be positioned to capitalize when value opportunities return.

Bad advice: “Markets are down, just ride it out.”   Better advice:  Don’t just ride it out – do something.   For the record, history shows that maintaining a long-term approach is one of the most effective strategies for navigating market volatility.   However, even if you’re a passive investor You can still be an active planner     Here’s what I’m focused on right now –   1. Harvesting Tax Losses   Realize losses on taxable investments to offset gains now or in the future.   It’s a smart way to create long-term tax advantages from short-term discomfort.   2. Rebalancing Portfolios   Use the downturn to buy low and restore portfolios to their target allocation.   It’s a disciplined way to manage risk and capture future upside.   3. Roth Conversions   Lower asset prices mean lower tax costs to convert traditional IRA dollars to Roth.   This can set up clients for years of tax-free growth.   4. Process and Reinvest RMDs   Required Minimum Distributions don’t stop during a downturn—but reinvesting them thoughtfully can keep that money working for the long haul.   This is an especially great time to distribute from IRAs inherited after 2020 and reinvest the proceeds.   5. Gifting to Kids and Grandkids   Down markets can be a great time for tax-efficient gifting.   Transferring assets when prices are lower can amplify the benefit to younger generations over time with less impact to lifetime exclusions.   6. Reaffirm Goals   Market volatility feels less scary when clients are reminded of their long-term plan, time horizon, and financial progress.   Recenter the conversation on purpose—not panic.   By focusing on what you can control, You turn uncertainty into opportunity And keep your plan moving forward, No matter what the markets are doing

Times it's been tempting to move to cash (see below). Each time we think "this time is different", and it always IS different! Future market downturns will also be different. 🙈 Each downturn is scary. 😕 Each downturn affects different people and businesses disproportionately. ⛰️ Each downturn alters our economic landscape. In each downturn, as an investor, it is tempting to sell out and go to cash, which locks in your losses. This is not to say that every investment will recover its original value, but generally speaking, if you hold diversified investments, we can expect the market to eventually recover- perhaps quickly like in 2020, perhaps slowly like we saw in 2008-09. Here's what you can do to protect yourself in times such as these (sorry not sorry if I sound like a broken record) ✅ Do NOT invest funds in the market if you expect to need them in the next 1-3 years! Keep these safe and liquid. ✅ If you have investments targeting long-term returns, don't move those to cash right now- make sure you're diversified, and that the allocations match your time horizon. But cash is not an appropriate asset for long-term funds if you need them to keep up with inflation. Even if we can see hard times ahead, without a crystal ball 🔮 it's impossible to know just when to buy back in, before the market rebounds. ✅ Unfortunately, we may be approaching a recession. This in mind, do everything you can to build up your savings buffer!!! Cut back where you can, carefully audit your spending and evaluate how many of those subscriptions you really need. If your job is at risk, invest in your personal network, freshen up your resume, etc. ✅ If you are currently making extra payments on your debt, but your emergency savings isn't fully funded, consider dropping to minimum payments until you've built up your buffer (3-6 months of expenses). Looking for silver linings? Now could be a great time to: 👉🏻 Make changes in non-qualified investment accounts on holdings that had substantial gains 👉🏻 Consider Roth conversions (doing these in a downturn is like converting at a discount) 👉🏻 Lump sum contributions- if you've got cash on the sidelines that you won't need soon, consider investing a chunk, and benefit from buying in low. If you'd like someone to give you advice specific to your financial situation, reach out to your financial advisor. If you don't have one, now is a great time to find one! 🙋🏼♀️

Markets wobble. Fear rises. The smart don’t react, they prepare. Here’s how disciplined investors stay calm and strategic: 1. Diversify Investments ↳ Spread risk across assets ↳ Reduce single-market impact → Balance beats concentration 2. Keep a Cash Reserve ↳ Liquidity for surprises ↳ Opportunity to buy dips → Peace of mind pays 3. Rebalance Portfolio ↳ Lock in gains from strong assets ↳ Restore original risk mix → Discipline protects returns 4. Focus on Quality ↳ Strong fundamentals weather storms ↳ Low debt, reliable earnings → Stability compounds value 5. Avoid Emotional Decisions ↳ Skip panic sales ↳ Ignore hype and noise → Strategy beats instinct 6. Increase Defensive Holdings ↳ Invest in resilient sectors ↳ Dividends keep flowing → Risk managed, income steady 7. Maintain a Long-Term View ↳ Remember history’s recoveries ↳ Focus on compounding, not spikes → Patience outperforms panic 8. Use Dollar-Cost Averaging ↳ Buy steadily over time ↳ Smooth out price swings → Consistency beats timing 9. Review Risk Tolerance ↳ Align with current goals ↳ Adjust comfort with volatility → Stress-free portfolios last Volatility is inevitable. Your reaction determines your results. What strategy keeps you steady when markets shake? Follow me Marc Henn for more. We want to help you Retire Early, Supercharge Your Cash Flow, and Minimize Taxes. Marc Henn is a licensed Investment Adviser with Harvest Financial Advisors, a registered entity with the U. S. Securities and Exchange Commission.