Volatile Market Checklist: Navigating Market Swings

As current markets demonstrate, market volatility is an unavoidable part of investing. While it can feel unsettling, it also provides an opportunity to reassess your financial strategy and ensure you're on track toward your long-term goals.

At times like these, staying focused on your financial plan is essential. That's why we've created our Volatile Market Checklist—a simple six-step guide to help you navigate uncertainty, minimize emotional decision-making, and identify potential opportunities.

1. Minimize Emotional Response to Market Movement

Market downturns can trigger worry, but history shows that patience is key. While a rebound is never guaranteed, markets have historically recovered after corrections.

• As of March 2025, the S&P 500 has approached correction territory due to ongoing inflation concerns and trade tensions.
• Historically, after market corrections (a drop of 10-19%), the S&P 500 has rebounded by an average of 13.1% within three months and has been positive 92% of the time. ¹

✅Checklist Question #1: Do you have any short-term financial needs that might require adjustments to your financial plan?

2. Evaluate Your Long-Term Plan

Successful investing requires a long-term perspective. Despite short-term swings, the stock market has historically trended upward over time. Market downturns can serve as a moment to reflect on whether your financial plan still aligns with your goals.

✅Checklist Question #2: Do you fully understand your long-term financial plan? If not, let's schedule a time to review and ensure it aligns with your objectives.

3. Re-Examine Your Budget and Debt

With inflation pressures persisting into 2025, this is a good time to revisit your budget. Ensuring you're maximizing your income while managing expenses can strengthen your financial foundation.

• Focus on eliminating high-interest debt, as rising interest rates can make borrowing more expensive.
• Consider adjusting your spending habits to account for higher costs in key areas like housing and energy.

✅Checklist Question #3: When did you last review your budget and debt payments? Do you know the interest rates on your outstanding debts?

4. Examine Your Risk Tolerance

If you're newer to investing, this may be your first experience with a significant downturn. Even seasoned investors can find volatile periods challenging.

• Your reaction to recent market swings can offer insight into your comfort level with risk.
• If market fluctuations are causing significant stress, a portfolio review may be in order to ensure your risk exposure aligns with your goals.

✅Checklist Question #4: Has the recent volatility made you uncomfortable with your current level of risk? If so, let's review your portfolio together.

5. The Importance of Diversification

One key strategy for navigating volatile markets is diversification. By spreading your investments across various asset classes, sectors, and geographies, you can potentially reduce the overall risk in your portfolio. Here are a few reasons why diversification is crucial:

• It helps mitigate the impact of any single investment's performance on your overall portfolio.
• It allows you to participate in the growth of different markets and sectors.
• It can provide a smoother ride during turbulent times, as losses in one area may be offset by gains in another.

✅Checklist Question #5: Is your portfolio properly diversified? If your answer is no or you aren’t sure, let's review your asset allocation to ensure it aligns with your goals and risk tolerance.

6. Explore Potential Opportunities

While downturns can be stressful, they can also present opportunities to strengthen your financial plan:

• Is now a good time to convert to a Roth IRA? Market dips may allow for tax-efficient conversions.
• Are you holding excess cash? Downturns can be an opportunity to invest at lower prices.
• Do you have the right amount of life insurance? Evaluating coverage during financial uncertainty is always a good practice.

✅Checklist Question #6: Do any of these opportunities resonate with you? Let's schedule a time to discuss how they fit into your financial plan.

Stay Focused on Your Goals

Thanks for reviewing our 2025 Volatile Market Checklist. We hope these steps help you stay focused on the bigger picture and navigate uncertainty with confidence. If you'd like to discuss any of these areas in more detail, email me at Matthew@allgoodfin.com or call me at 331-229-3224 to setup a time to chat.

We're here to help you build a long-term plan designed to weather the ups and downs—so you can focus on your future with clarity and confidence.