Market volatility is inevitable, and for many investors, it can feel like a storm threatening to derail their financial goals. The ups and downs of the market can spark panic, fear, or even inaction—none of which serve your long-term interests. The key to navigating the uncertainty of market volatility isn’t about predicting the next market move; it’s about building a financial plan with your advisor that thrives in any market condition.
At Falbo Wealth Management, we specialize in helping clients achieve not just resilience but antifragility—the ability to grow stronger and seize opportunities during turbulent times. Here’s how you can create a financial plan that stands firm in uncertainty and thrives in adversity.
- Start with a Clear Financial blueprint
- Who will be impacted by your financial decisions?
- Why are you saving and investing?
- When will you need access to your money?
- How much do you need to achieve your goals?
- Build an All-Weather Portfolio
- Who Diversification: Spread your investments across asset classes, industries, and regions to reduce risk.
When one area of the market underperforms, others may stabilize your portfolio. - Who Asset Allocation: Your mix of stocks, bonds, and other investments should align with your goals and adapt as you approach milestones like retirement.
- Who Rebalancing: Regularly review and adjust your portfolio to ensure it remains aligned with your strategy. For example, during market downturns, rebalancing can help you buy low and sell high.
- Prepare for Life’s Transitions
- Emergency Savings: Aim to have 3–6 months of expenses in a liquid account to handle unexpected events without derailing your investment strategy.
- Insurance Coverage: Protect against life’s “what-ifs” with appropriate health, life, and long-term care insurance.
- Tax Strategies: Work with professionals to minimize taxes on withdrawals, inheritance, and investment income.
- Don’t Let Emotions Drive Decisions
- Focus on the Long Term: Remember, investing is a marathon, not a sprint. Short-term volatility shouldn’t distract you from your ultimate goals.
- Stick to Your Plan: If your blueprint is well-designed, it accounts for market ups and downs. Trust the process.
- Seek Professional Guidance: A financial advisor can provide perspective and help you avoid costly mistakes during emotional moments.
- Turn Challenges into Opportunities
- Rebalancing: Use market dips to buy undervalued assets and realign your portfolio.
- Tax-Loss Harvesting: Sell investments at a loss to offset gains elsewhere and reduce your tax liability.
- Roth Conversions: Convert traditional retirement accounts to Roth IRAs during market lows to lock in future tax-free growth.
- Work with a Trusted Financial Partner
- Embrace a Thriving Financial Future
Every great plan begins with clarity. Before you can weather market storms, you need to know exactly where you’re headed. This involves creating a financial blueprint that ties your life to your money.
Your blueprint should answer key questions:
This plan should not be static. Life evolves, and so should your financial strategy. Whether you’re planning for retirement, a child’s education, or your dream vacation home, your blueprint must be flexible enough to adjust as your circumstances or market conditions change.
There are a couple of ways we approach this with our clients, but one of the key worksheets they love is our Financial Blueprint. Not only does it help us narrow your retirement vision, but it also compiles your risk score, available resources, and projected spending in retirement so we can determine your retirement needs and make a viable plan for your future.
A financial plan that thrives in any market includes an investment strategy designed for both sunny days and storms. This means creating a diversified portfolio tailored to your goals, risk tolerance, and timeline.
The goal isn’t to eliminate risk—risk is necessary for growth—but to manage it strategically. So first, we start with our Investment Experience and Risk Assessment; we then pair that with your timeline, resources, and goals to identify how much risk it makes sense for you to take at this point in your life. We don’t want to take more than is necessary but also don’t want to miss out on opportunities for you to grow your wealth. It’s a fine balance to strike so you can increase the probability of reaching your goals or potentially reaching them faster.
Markets aren’t the only source of uncertainty. Life transitions—such as job changes, marriage, or retirement—can also challenge your financial plan. In our experience, on average, retirees face 7–8 major life transitions, ranging from unexpected healthcare costs to changes in income sources.
Your financial plan should include:
By planning for the inevitable changes in life, you’re better equipped to adapt without compromising your long-
term goals. Again, it’s about building antifragility to become an all-weather investor.
One of the biggest threats to any financial plan is emotional decision-making. It’s human nature to panic during a market downturn or get overly optimistic during a bull market. However, these emotional reactions often lead to poor financial choices—such as selling low or buying high.
Here’s how to stay disciplined:
Anytime problems feel overwhelming, it can help to try and shrink the issue down to size. So instead of just feeling afraid about market volatility, try and pinpoint the real thoughts that are bringing you down. Oftentimes, our feelings can turn molehill size problems into a mountainous range of emotions.
This is where having a financial advisor by your side is invaluable. You can voice your concerns to your advisor when things seem scary, go over your own portfolio with them to review how your plan was built to meet your goals with inevitable volatility in mind, and make any adjustments to your risk profile to make sure you’re
confident in your plan.
A plan that thrives in any market doesn’t just survive downturns—it uses them to your advantage. This is where the concept of antifragility comes into play. When fragile investors face challenges, they often detour from their original goals, extending their journey or making it unattainable. Resilient investors stay on course, while antifragile investors seize opportunities to reach their goals even faster.
During challenging market conditions, consider these strategies:
By viewing market volatility as an opportunity rather than a threat, you can strengthen your financial position over time.
Creating and maintaining a financial plan that thrives in any market requires expertise, perspective, and discipline. Most people can’t do it alone—and they don’t have to. At Falbo Wealth Management, we act as your financial immune system, providing the tools and guidance you need to stay on track.
We’ve guided clients through every major market cycle over the past three decades, from the dot-com bubble to the Great Recession to the COVID crash. Our experience has taught us that with the right plan and consistent support, uncertainty becomes less intimidating and more manageable.
The decisions you make today will shape the trajectory of your future, much like an author carefully plans the plot of their book. But with a landscape as complex and fluctuating as the financial markets, it’s crucial to have a qualified advisor to help you script the best possible future.
Market fluctuations and life transitions are inevitable, but they don’t have to derail your financial goals. By building a clear blueprint, diversifying your portfolio, preparing for transitions, and staying disciplined, you can create a financial plan that not only survives uncertainty but thrives in it.
Ready to build a plan that thrives in any market?
Schedule a complimentary consultation with Falbo Wealth Management today, and let’s start turning challenges into opportunities for your financial future.
The opinions expressed in this material are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security, investment, or other financial product. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.