It’s no secret that financial markets have been on a rollercoaster, especially over the past month. As we described in our blog post about tariffs here and our special report on the wild swings of the indices (and our recommendations) here, market volatility has reached historic levels by any standard. Investors, economists, market observers (and wealth advisors!) have all been understandably concerned with these wild gyrations, the potential effect on short- and long-term portfolios, and the welfare of both today’s and tomorrow’s retirees.
At FSA, we believe that actively managing your wealth (cushioning during the rough periods, amplifying growth during rising markets) can be beneficial to long-term wealth preservation. In our view, not losing = winning. In other words (paraphrasing golf wisdom), scoring par on a difficult hole is often the best strategy, or not losing a stroke during a difficult hole can win you a tournament. Here are some of the ways to preserve your wealth during financially stormy weather.
Monitoring and Understanding Market Activity
It’s not just enough to monitor what’s going on in the market; investors and their advisors need to understand why the market is moving the way it is, both in rising markets and declining ones as well. If you don’t understand the underlying influences that move market behavior, deciding how to adjust your investments is really throwing darts while blindfolded.
Markets are made up of an uncountable number of traders, all buying or selling for their own reasons and based upon whatever news or information (or specifically their interpretation and perception of that information) is available at any given time. Some of it is meaningful. Many times, it is not. Being able to discern between the two is key to making solid, informed strategic decisions, especially during days or periods of heavy market activity. This is one of the core services we provide to our clients.
Focus, Focus, Focus
Many wealth advisors and other investment professionals try to be all things financial to all people. Those without advisors listen to this investment expert…then that one…and then try all on their own to figure out what’s happening and how to position their portfolio—all while maintaining their own career and living their busy lives with their families. Many advisors do the same in working with their clients.
We believe this could be a recipe for problems; there’s just too much happening and too many variables to sensibly cobble a solid investment strategy together. Many financial advisors also fall victim to this idea that they can both effectively plan with clients, run their business, and stay on top of market activity, all at the same time.
This is why we believe in specialization at FSA Wealth Partners. We have specialist teams focused on market analysis while other professionals at our firm focus on the client and their unique planning needs. Together, we create a collaborative environment where the best of both work together for the benefit of the client’s long-term success.
Know Your Ingredients and Eat Your Own Cooking
Investment management comes in many different flavors and styles. Imagine, though, having an advisor who isn’t all that familiar with the behind-the-scenes analysis (or even the people who are doing the actual work) that goes into managing your hard-earned life savings? It happens all the time in the advising world.
Instead, it’s better to know and understand (even on a surface level) why and how you’re invested in particular market situations and having the reasoning behind strategy shifts when markets change course. You may not understand—or want to understand—the specific jargon or minute details of each investment decision, but at least you would want to be able to explain to your spouse, your family, or others about your (or your wealth manager’s) approach in growing and preserving your wealth.
And if your advisor cannot break down the strategy(s) into simple terms you can understand, you might wonder if they really understand themselves. At our firm, we eat our own cooking and can explain how we created our signature strategies too.
Have a Safety Net to Catch You
You wouldn’t hike across a ravine or a raging river, or go rock-climbing as an amateur, without a harness. So why wouldn’t you have a safety strategy to catch your portfolio when a market earthquake rumbles or the financial seas get rough? You wouldn’t (or shouldn’t). The costs could derail your plans and alter your life for years, maybe permanently.
This is the prime reason FSA Wealth Partners developed our FSA Safety Net® strategy. “Succeeding by not losing” means balancing the prevention of losses during downturns with the pursuit of gains during rising market upturns. Employing specific strategic “shift points” can help cushion portfolio values during market upheavals and offer favorable advantages when conditions improve. This “safety net” may provide assurance during anxiety-provoking downturns and tactical opportunities during upswings that can help realize long-term investment objectives.
A Wealth Manager That Addresses All Your Financial Needs
At FSA, we empower professionals, families, and retirees to match their financial aspirations with a life they love. Not only with guidance on financial and investment planning matters, but in all areas that could affect your hopes and dreams, like preserving your wealth during today’s extra-volatile environment.
Contact us today to schedule a consultation and begin building a plan tailored to your unique vision for this year and beyond. Call us at (301) 949-7300 or email questions@FSAwealthpartners.com.
FSA’s current written Disclosure Brochure and Privacy Notice discussing our current advisory services and fees is also available at www.fsawealthpartners.com/disclosures or by calling 301-949-7300.
