Markets are volatile. Here’s what to do with your money

new York
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It’s been an eventful year for investors.

Stocks are nearing record highs, but volatility is returning to markets as trade tensions between the United States and China escalate. Gold and silver – safe havens in times of uncertainty – are soar higher.

Investors worry about trade wars, signs of a AI bubble and now the credit market turmoil.

With all the uncertainty, it can feel overwhelming. However, experts say it’s best for long-term investors to stay calm, avoid the noise and stick to a consistent plan that aligns with their financial goals.

“Rather than trying to predict the next downturn, the wisest thing is to stick to the fundamentals,” said Jared Gagné, wealth manager at Claro Advisors.

“A good investment is boring,” he said.

US stocks have been on a record rallyrebounding strongly after falling in the spring due to concerns over President Donald Trump’s tariffs. And Wall Street strategists say stocks have more room to run, with better-than-expected corporate earnings and interest rate cuts from the Federal Reserve supporting stocks.

Yet concerns persist about a stock market bubble and historically high valuations.

It is essential for investors to maintain a well-diversified portfolio with target allocations for each asset. A typical portfolio example includes 60% stocks, 30% bonds, 5% commodities like gold, and 5% cash.

“Keep a diversified portfolio, rebalance when positions become strained, and continue to invest on a disciplined schedule,” Mr. Gagné said.

“If part of your portfolio has blown out, consider returning to your target allocation rather than making massive exits,” he said. “This keeps gains aligned with your long-term plan while removing some benefits.”

Younger investors, who have time to compensate for potential market declines, can likely invest more in riskier assets like stocks; Investors nearing retirement, who might need their money sooner and probably don’t have the same amount of time to compensate for a market downturn, should have more bonds and cash equivalents like Treasuries.

“Make sure your investment strategy aligns with your financial goals,” said Ryan Kenny, portfolio manager at Crestwood Advisors. “An approach based on quality and diversification and something that allows you to overcome the volatility inherent in the markets.”

Dollar cost averaging, when investors buy stocks at consistent intervals over time, can also help smooth out market ups and downs.

“It’s a good way to discipline yourself and not get carried away in the heat of the moment,” said Tim Thomas, chief investment officer at Badgley Phelps Wealth Managers.

Timing the market by predicting which direction stocks will take is an exceptionally rare skill – and doing it consistently over long periods of time is even more difficult. For the vast majority of investors, it is much better to stay put than to try to sell or buy at the peak of opportunity.

The S&P 500 is up 30% since April. Investors who sold their securities in the market panic that month were unable to benefit from these monster gains.

“To successfully time the market, you have to get two things right: 1) knowing the right time to get out and 2) knowing the right time to get in,” said Sam Stovall, chief investment strategist at CFRA Research. “Investors would do well to remember how quickly the market tends to recover from a decline. »

History shows that the S&P 500 tends to rise over the long term, rewarding investors who stay in the market. Since World War II, it has taken an average of four months from a low of up to 20% to return to equilibrium, Stovall said.

“Investors who focus on time in the market, not timing the market, are the most successful in investing,” said Gagné of Claro Advisors.

As with all things investing, there is no one-size-fits-all solution. Each person has their own financial goals and risk tolerance.

But whatever your plan, it’s important to stick to it consistently.

“It’s really important to keep emotions out of it and have a repeatable system no matter what’s happening in the market environment,” said Thomas of Badgley Phelps Wealth Managers. “Simply keeping a cool head is the key to success.”