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April 2025
Hello Megan,
Navigating Market Volatility Together
Recent market swings following the tariff announcements have understandably caused concern. At Watercolor Financial, we want to share how we prepare for — and actively respond to — market volatility, so you feel confident knowing your financial strategy is in capable hands.
Before Volatility: Proactive Preparation
In nearly every meeting with our clients, we ask about available cash reserves. This is a deliberate part of our long-term planning strategy. By ensuring that you have sufficient cash on hand, we can position your investment portfolio with a longer time horizon — typically five years or more — giving it the ability to weather downturns and benefit from eventual recoveries. This proactive step helps reduce the need to sell during a decline, which can lock in losses. Instead, it gives your investments the time and space to rebound, as markets have historically done.
During Volatility: Active Oversight
Market volatility isn’t unusual — historically, the S&P 500 experiences a 20% or greater decline approximately every five years. Preparation goes a long way, but we also stay highly engaged when markets shift. In just the past two weeks, our advisors have met three times with our asset management consultant to review current market conditions, assess investment performance, and evaluate any potential changes to allocations. These meetings are in addition to individual reviews conducted by each advisor. Even when we decide to stay the course, it's a result of thoughtful, deliberate analysis — not inaction.
Finding Opportunities Amid Uncertainty
Volatile markets can also create opportunities. We're already leveraging some of these, including strategies like tax-loss harvesting and Roth conversions, which can be particularly beneficial during market downturns.
Here for You
We understand that market uncertainty can be unsettling. If you have questions or simply want to talk things through, don’t hesitate to reach out. Simply reply to this email. We're here to support you — not just during market highs, but in every phase of your financial journey.
Sincerely,
Megan, Bleckley and Cass
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