Staying the Course through Volatile Markets

Turbulent times can bring turbulent markets. Many factors cause chaotic swings in the investing world including housing, political elections, and international instability.

Despite the financial queasiness this can have, experts consistently have one piece of advice for investors: stay calm and stay the course. Maintaining a long-term investment strategy can help weather the storm of a volatile stock market, whereas reacting irrationally or panicking is the last thing investors should do.

History tends to repeat

There are a few ways to keep nerves at bay amidst a sea of daunting headlines.

First, a historical review shows that market fluctuations are normal. This should serve as a comforting reminder during unstable conditions. According to Fidelity, “...while market downturns may be unsettling, history shows stocks have recovered and delivered long-term gains.”1

While no one can predict the stock market with absolute certainty, the significant crashes of the last century all saw periods of recovery. For example, after the 2008 market crash, the recovery began almost immediately and achieved an eventual increase of 178% in 5-year returns.2

These past events reinforce the importance of focusing on long-term financial strategies and goals, not short-term fluctuations. The markets will have bull and bear runs which need time to play out without trying to anticipate short-term trends.

However, past performance is no guarantee of future results.

Don’t try to catch a falling knife

Another potential mistake that investors can make is to stop saving during a market downturn.

A popular way to continue savings momentum when nerves are being tested is dollar-cost averaging, or in other words, investing a fixed amount on a regular schedule (e.g., per pay period) that generally results in buying more shares when prices are low and less shares when they are high.

Dollar-cost averaging is a stabilizing approach. It can take away some of the fear of timing risk and become less of a system shock than lump sum investing. However, this strategy does not ensure a profit and does not protect against loss in declining markets.

You need lemons to make lemonade

Downturns are a perfect time to consult with a financial professional or investment advisor to review different strategies and also rebalance your portfolio. It might be time to look at investments

1 Fidelity Viewpoints. “6 Tips to Navigate Volatile Markets.” Fidelity. 6 March 2025.

2 Fidelity Viewpoints. “6 Tips to Navigate Volatile Markets.” Fidelity. 6 March 2025.

that have lost value, which can potentially help manage risk exposure and provide an opportunity to reposition the portfolio for recovery.

Another possibility is to consider a Roth conversion. If your plan allows for a Roth conversion - moving money from pretax dollars to Roth dollars - then a downturn could help. A conversion in a downturn might result in a lower tax bill for the same number of shares sold, and then the

individual can experience the benefits of a Roth account, allowing qualified distributions of future growth to be tax free.3

Market downturns are a part of any investing lifecycle so it’s best to keep a steady hand, consult with your advisor and consider all options so you can weather through this market cycle - and the next

one.

Information provided herein is not, and should not be regarded as, investment advice or as a recommendation. Investing involves risk, including potential loss of principal.

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The Gasaway Team

Gasaway Investment Advisors

7110 Stadium Dr., Kalamazoo, MI, 49009

Email: info@gasawayinvestments.com

Phone: (269) 324-0080

Website: www.gasawayinvestments.com

This information is provided as a general guide to educate plan sponsors. It is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute without permission.

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Content is for educational purposes only and should not be construed as a solicitation or offer to sell securities or provide investment, tax, or legal advice. Past performance is not indicative of future results. Investing involves risk, including the potential loss of principal. Always consult with a qualified financial advisor before making any investment decisions. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Advisor Public Disclosure

Site https://adviserinfo.sec.gov/firm/summary/123807.

3 Fidelity Viewpoints. “6 Tips to Navigate Volatile Markets.” Fidelity. 6 March 2025.