MONEY HACKS: Investment Strategies for Market Volatility

As summer wraps up and the back-to-school season begins, many investors are feeling the impact of recent market volatility. Whether you’re managing a 401(k), IRA, or a brokerage account, understanding how to navigate these fluctuations is necessary for maintaining a healthy investment strategy.

In this Money Hacks, we talk about the importance of aligning your investment portfolio with your age, time horizon, and risk tolerance. The recent uptick in market swings emphasizes the need to have a solid plan that reflects your long-term goals rather than reacting to short-term market movements.

As we head into the fall, with economic uncertainties and geopolitical events on the horizon, maintaining a consistent strategy aligned with your financial goals remains key. Stay committed to your investment plan and remember that enduring market fluctuations is part of the journey to long-term financial growth.

Any money questions you’d like answered? Our Money Hacks series is created from conversations we have with employees, investors, savers, and all people planning for their financial futures. What topics are on your mind for our next episode?

Video Transcript:

Hey, this is Alex Assaley, and it’s episode number 118 of Money Hacks. We’re at the tail end of August here. Back to school time frame and it was my son’s first day of first grade. So, the unofficial sort of close to summer is coming really soon and as that’s happened, we’ve also seen a bit of a pickup in volatility, ups and downs in the stock market. It’s still been a really great year for stocks in 2024, but in the last 3 or 4 weeks, we’ve started to see, some wider swings in the market.

And we’ve been hearing from a number of investors and savers for 401(k) and for 403(b) plans that are a little bit nervous, and worried about the markets. And so, I thought I’d do this video just as a reminder of the importance of thinking about your investment mix and your investment portfolio through the lens of really two primary criteria your age and time horizon, and your individual preference and wherewithal for being able to take risk.

So age, time horizon, and risk profile are really the two questions you want to ask yourself when it comes to how to build an investment allocation, whether it’s your 401(k) an IRA, or a goal-based brokerage account you have for a financial priority, that’s five, six, seven years down the road. Build that investment mix that aligns with those two questions and then stick to it as you navigate the ups and downs and the noise that happens in the short term.

About two weeks ago, we saw a massive sell-off across all three major indices. And one day I think Dow, S&P, and Nasdaq were all down over 3%. Of course, now two weeks later, we’ve actually recovered most, if not all of that selloff that happened over that stretch of a few days. And it’s just a reminder that you’re going to see volatility. You’re going to see fluctuations in the market every single year. And it’s really challenging if not impossible to time when they get in and when they get out. And the best investors grow and accumulate their assets by building a mix that’s right for them and then sticking to it even when things get tough, even in periods where perhaps, emotionally, you know, it’s stressful or draining to see those ups and downs in the markets.

I think we’re going to see more of that as we get into the fall with a number of things happening from an economic perspective, from a geopolitical perspective, and with a US presidential election. So, make sure your investments are aligned today in a way that’s right for you. and then focus on building a long-term, consistent strategy and sticking to it.

If you have questions or comments, feel free to reach out. Type them as a follow-up to this message. Otherwise, we’ll see you next time. Thanks!