By Max Feller, Financial Advisor, Rea Wealth Management
Market volatility: two words that can elicit feelings of either fear or opportunity, depending on who you ask. For some, tumultuous times feel like riding a roller coaster blindfolded, not knowing when the next turn or drop will come. For others, they offer a chance to seize new openings and redefine success.
Whether you’re a seasoned investor with a diversified portfolio or an entrepreneur navigating the shifting sands of business, market volatility is a reality you’ll face. And while the source of volatility often changes — from economic cycles to geopolitical events — the right strategies can help you weather any storm. One recent example: There was heightened uncertainty around global trade and tariffs, which sparked sharp market reactions and forced businesses and investors alike to recalibrate.
Here are some timeless strategies to help navigate periods of instability, no matter what form they take:
1. Embrace a Long-Term Perspective
It’s easy to get caught up in day-to-day headlines, now more than ever. We are constantly bombarded with the world’s events whether we like it or not. Although it’s essential to stay informed, it’s equally important to zoom out and view the bigger picture.
- Investors: Historically, markets have rewarded long-term thinkers. Temporary pullbacks caused by policy shifts — such as recent tariffs and trade renegotiations — are rarely, if ever, permanent. They are also a natural event and more common than you think. A diversified portfolio aligned with long-term goals provides a buffer against these short-term shocks.
- Entrepreneurs: Business cycles, like markets, ebb and flow. A policy change might reduce consumer spending or increase your costs temporarily, but it may also open the door to innovation, operational improvements, or gaining market share from less nimble competitors.
2. Stay Educated and Informed
Knowledge is one of your best tools in uncertain times. Understanding why volatility might be occurring, even if only partially, empowers smarter decision-making. Remaining calm during the storm is paramount.
- Investors: Know what you own and why. Understand which industries or asset classes may be more sensitive to changes to certain types of uncertainty in the world economy. For example, export-heavy companies may be more affected by trade disruptions than those with domestic revenue models.
- Entrepreneurs: Stay up to date on supply chain dynamics, regulatory developments, and emerging trends in your industry. Being proactive, rather than reactive, often makes the difference between surviving and thriving.
3. Keep Emotions in Check
Market swings and policy news will stir up anxiety in everyone, but emotionally driven decisions often lead to regret. The emotional human psyche often wants to sell when low and buy when high, but as we know in the world of investing, that strategy is the exact opposite of what we want to do. We must check ourselves as investors to not let emotion drive the decisions we make and rely on the gameplan we have established instead.
- Investors: Avoid the impulse to panic-sell during downturns or chase returns during rallies. Stick to your strategy and rely on a disciplined approach. When volatility strikes, the best question often isn’t “What should I do right now?” but “Has anything changed in my long-term plan?”
- Entrepreneurs: Likewise, avoid knee-jerk business decisions based on fear or headlines. Before making major pivots, assess the data, consult your advisors, and consider your long-term goals.
4. Maintain Liquidity
Accessible cash — or liquidity — acts as a buffer during uncertain times.
- Investors: Rather than pulling out of the market entirely, maintain an emergency fund or cash reserve as a permanent portion of your portfolio. This gives you the flexibility to buy when others are fearful, just as Mr. Buffett says — turning volatility into opportunity for long term growth.
- Entrepreneurs: A cash cushion allows your business to adapt to temporary changes, like a rise in input costs due to tariffs or supply disruptions, without compromising core operations.
5. Foster Flexibility
Adaptability is a competitive advantage — in investing and in business.
- Investors: Consider rebalancing your portfolio periodically or exploring new asset classes if conditions shift. Flexibility doesn’t mean abandoning your plan but evolving it thoughtfully over time.
- Entrepreneurs: Whether it’s expanding into new markets, reevaluating suppliers, or integrating new technologies, those willing to evolve tend to be the ones who lead during change — not just survive it.
Market volatility is more than just a buzzword; it reflects the heartbeat of a constantly evolving economy. Today’s challenge might be tariffs, while tomorrow’s could be interest rate changes or geopolitical unrest. The variables may shift, but the mindset required to navigate them remains the same: Focus on the long term, stay informed, and remain grounded in your goals.
When you build a relationship of trust and open communication with your advisor, you’ll be better positioned to interpret these changes not as threats, but as part of the journey toward success. We at Rea Wealth Management look forward to working alongside you to develop a plan in which you can be confident, both in good times and most importantly, in volatile times.
Securities and advisory services offered through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered by Rea Wealth Management, a Registered Investment Adviser, and fixed insurance products and services are separate and unrelated to Commonwealth.
Rea Wealth Management is headquartered at 419 West High Avenue in New Philadelphia Ohio 44663.
