Expecting the Unexpected
Periods of volatility offer opportunities to pause, reflect, and rebalance so investors can weather future “storms” with confidence.
by Bill Donahue

“Truly unbelievable.” That’s how Jill B. Steinberg describes the six or seven months that have passed since the United States started feeling the ill effects of the COVID-19 pandemic—physically, emotionally, and economically. Like every other American, Steinberg has had to adjust to another “new normal,” finding bright spots along the way. She also views recent world events through the lens of someone who considers it her job to plan for the unexpected.
“It’s been very nerve wracking,” says Steinberg, managing director and partner with Beacon Pointe Advisors in Bala Cynwyd. “People have been worried about their health and their money. On one hand there’s been less panic [about money] because people were more concerned about the health risks. On the other hand, it was scary how fast [the financial markets] went down. I was starting to think we’d never have a new client.”
She knew better, of course. She has seen some parallels to the crash of 2008, though the most recent one has had a flavor all its own.
“In 2008 it was bad, but it was over a much longer period of time,” she recalls. “People thought the bottom was here, and it kept going down, down, down. Then the government came in and people thought: The cavalry has arrived. The whole thing has really flirted with people’s emotions.”
So, where do we go from here? While the markets have largely recovered from the crash that began in late February, the event has given investors opportunity to pause and reflect on their ability to tolerate volatility.
“We can control the risk level, so let’s make sure your risk level is appropriate,” Steinberg says. “If you are looking for the long term, you should be riding this out. If you do have short-term goals, like buying a house or needing to pay for [a child’s] college, now is the time to do that. It’s also a good time to allocate for expenses. Ask yourself: Do you have an emergency reserve fund?”
Considering the pandemic’s chilling effect on employment, such a fund might help tide an investor over in the event that he or she loses a job. It can also help to accommodate any unforeseen expenses, such as a new roof that has been damaged in a storm with high winds.
Hope and Longing
In general, advisors suggest the pandemic has made their clients reevaluate their priorities. As Steinberg says, “They’re spending money on what’s important.”
For some, this might include moving into a new home or purchasing a new car. For others, it might mean getting their estate planning documents in order, so their wishes—not only for their assets but also for their physical selves—will be honored in the event of an unfortunate turn.
“We focus on time horizon,” adds Troy B. Vogt, CFP, chief investment officer and financial advisor with Market Street Wealth Management in West Chester. “We look for near-term money to be treated very prudently, very safe, which allows us to be more patient with long-term money.”
Allocating assets for different “buckets”—short term, middle term, and long term—enables investors to be patient as their portfolios “weather storms,” as Vogt puts it. In other words, an investor may sleep better if they have a comprehensive, well-thought-out plan, because current market conditions will have little to no bearing on long-term goals.
“When someone sees the stock market fall, they know it won’t affect money that they’re not going to touch for another 10 to 15 years, so they’re able to not panic,” he adds. “This has been a bad storm, but we know there will be more storms. Storms will always happen, and realizing that—and preparing for it—allows you to be a better long-term investor.”
More than ever, investors are looking to the future with hope and longing. They crave a return to normalcy that will come from an end to the pandemic, as well as resolution to the 2020 Presidential Election.
“In March, it seemed like the world was coming to an end and the market would never recover, but volatility goes both ways,” Steinberg says. “When markets get really volatile, there are strategies to take advantage of it. It can be nerve wracking when you’re going through it, but there are also opportunities to be had. It’s also an opportunity to rebalance so people can feel more comfortable when the next period [of volatility] happens.”
Published (and copyrighted) in Suburban Life magazine, September 2020.