Rock Bottom (4/3/2025)

I’ve had a really tough time this week deciding what to write about here. On one hand, the market had the worst day today in over 5 years so I feel compelled to address your fears, concerns and questions. On the other hand, you may already be bombarded with headlines about the stock market’s response to tariff news this week or you may actively be trying to avoid this news – in either of those scenarios, I’d love to give you something more constructive to think about. So in the end, we’re doing a little of both. 

For those of you who could benefit from a friendly reminder that market volatility is normal (or anyone who may not have received the first edition of this newsletter), I’m including my commentary from back in February at the end of today’s message below. If you’re ready to jump right to constructive guidance, here’s what I’ve been telling clients to do in light of crazy markets:  

• Keep a fully stocked Emergency Fund. If you feel that a layoff is likely, consider stockpiling excess cash for a transition fund.

• Keep funds for short term goals out of the market.

• If you're nearing retirement, keep a significant portion of your portfolio in high quality shorter duration bonds so that you can draw from your bond portfolio to support income until equities recover.

• For long term goals, continue to invest for the long term. Market corrections are opportunities to buy equities at a discount, so continue portfolio contributions as planned.

• If you are deploying a large amount of cash into the market, consider phasing cash in over time.

• If equity compensation is a large portion of your annual income, manage your spending so that decreases in your company stock price won't impact your ability to pay your bills. 

• If you have RSUs vesting on an ongoing basis, continue to sell shares as they vest.