Ups and Downs
While economic headwinds leave some investors feeling shaken and stirred, advisors say “the sun will come out again.”
Recent headlines seem to portend a rough road ahead for the U.S. economy. From U.S. News & World Report, March 5: “Will the Stock Market Crash in 2025?” From CBS News, March 18: “Investors are fleeing U.S. stocks as tariff risks loom.” From CNN, also March 18, featuring a quote from U.S. Treasury Secretary Scott Bessent: “ ‘I can’t guarantee’ America will avoid a recession.”
The year 2025 has been off to a volatile start. Between the ongoing threat of an escalating trade war, sprawling government layoffs courtesy of the Elon Musk-led Department of Government Efficiency, and uncertainty caused by ongoing wars and global instability, one can understand why some investors might feel a bit shellshocked.
But are conditions at home as dire as the headlines suggest?
“As pundits extrapolate negative implications of tariffs from history, it feels like we are in uncharted waters here and we are headed into a storm,” says Patricia C. Brennan, CFP®, the CEO of Key Financial Inc. in West Chester. “In my opinion, most of the financial damage from this storm has already occurred. It will still be scary, but duck down and know that storms happen and that the sun will come out again.”
Every year has its share of volatility, moments of ups and downs caused by any number of factors. In other words, investors should not let short-term volatility affect their long-term plans.
“If readers have followed the advice to assume a wicked bear market can happen at any time, and money needed over the next three years from the portfolio is conservatively invested for preservation, then do not change important goals,” Brennan adds. “If fully invested, know that no one can predict what will happen next week, month, year, or even decade. A real financial plan that models cash-flow needs under various stress tests—bear markets, higher taxes, lower returns, long-term care needs—will help readers make smart decisions.”
In addition, economic benchmarks such as the S&P 500 Six-Year Index Analysis suggest reasons for optimism, according to Paul Bufty, the founder of Yardley-based Financial Group of Philadelphia Inc.
“Studies have shown that since 1980, those six-year periods rarely have a downturn, but in the interim the market can be down,” he says. “Could the Eagles be down in the second quarter? Yeah, but you have to think about time horizon. If you’re 50 years old, you can’t touch your 401(k) until you’re 59 and a half, so that time horizon has already been decided. Over the next six-year period, until 2031, the chance of losing money is probably very low.”
Bufty doesn’t want to invalidate the anxiety investors might feel given the current climate. Instead, he likes to help investors look at their money in terms of “buckets”: now money, for the next six months to a year, readily accessible in a “bank, mattress, or dresser”; soon money, for the next three to seven years, invested in products designed to have a better return, likely not to be cashed in anytime soon; and later money, meaning for retirement, invested in IRAs and other long-term investment vehicles.
“Each of those buckets has a different purpose,” he says. “I’m a golfer, so I’ll put it in golf terms. … A driver doesn’t work well out of the sand, and a putter doesn’t work great off the tee. Different tools achieve different results.”
Brendan Magee admits there’s plenty of “drama” in financial markets right now. That said, he believes the people most affected by current volatility are those who do not yet know their purpose for money—meaning, they have not aligned their investment philosophy with their goals in life.
“To get through the drama, you have to discover your purpose,” says Magee, the founder of Inevitable Wealth Coaching, which is headquartered in Delaware County. “Otherwise you are at the mercy of current events. We fall into the cycle of ‘If this happens I have to do this’ and ‘If that happens I have to do that.’ If you make investing decisions based on what you’re seeing on the news, by the time you’ve seen it, you’re skating to where the puck was.”
He is, of course, referring to the famous quote from Wayne Gretzky—the National Hockey League’s all-time leading scorer—having to do with anticipating future outcomes (where the puck will be) as opposed to focusing on the present or past (where the puck is or was).
“If I start doing things based on unpredictable events,” Magee adds, “I’m not engaged in investing; I’m gambling and speculating with money, and I’m going to lose—and I’m going to pay a [boatload] in fees along the way. That’s the sad thing for investors who have not discovered and defined their purpose and aligned it with the rest of their life.”
Andrew S. Vitek, first vice president/investments with Wyncote Wealth Management Group in Wyncote, had suspected some sort of shift with the change in administrations following November’s presidential election. So he began preparing clients for an anticipated pullback.
“This is the time when you make money—rebalancing portfolios, not running away but facing it,” he says. “When we get to certain points, that’s when the institutions kick in, and we have so many tailwinds behind us—the [Federal Reserve] likely to lower rates, an administration interested in cutting corporate taxes and regulations, and different sectors starting to dig in and move. These pullbacks are normal, and you have to take advantage of them.”
When asked if he believes a recession could be likely, Vitek answers without hesitation: “Absolutely.” People from all walks of life often bristle at the term, but he says it’s not all doom and gloom.
“People are so scared of that word—recession—because it’s not easy, but it’s coming, and it’s part of a normal economic cycle,” he adds. “Prepare for that. It’s not ‘you’re in the market and then you’re out.’ The value side of the market is moving now, and the growth side is getting hit. If you’re diversified enough and spread out, with active management, you should do just fine.
“Our approach: When people are heading out of the market, we’re heading in,” he continues. “Whenever I speak to clients, I try to condition them over time so they can live their lives, taking the anxiety and fear they may be feeling and compartmentalizing it. Let me worry about it. When markets go down, smile. If your advisor has set your account correctly, your income should never be affected. … In the course of history, markets have gone down, and they have always come back.”
While no advisor has a crystal ball, Vitek and many of his peers see the likelihood for higher markets and more rallying, though further pullbacks are certainly not outside the realm of possibility.
“The U.S. has the most dynamic economy in the world,” says Brennan of Key Financial Inc. “Volatility is a feature of markets, not something to avoid. … Consumers are still spending money, and balance sheets are healthy with lower consumer debt. While government layoffs haven’t hit the numbers yet, we have full employment in the U.S., and our economy has been growing. The stock market has been plunging because of a fear that we could end up in a recession, but as a leading indicator, it isn’t always right. It wasn’t in 2022 and may not be correct again.”
‘It’s Not All or None’
Humans are conditioned to avoid pain, which is why some investors get spooked by economic news they consider less than positive. When markets go down or other indicators point to rough seas ahead, some investors choose to delay important decisions until the waters calm.
Humans are conditioned to avoid pain, which is why some investors get spooked by economic news they consider less than positive. When markets go down or other indicators point to rough seas ahead, some investors choose to delay important decisions until the waters calm.
Andrew S. Vitek of Wyncote Wealth Management Group has some advice for investors during times that make them uncomfortable: “Continue investing but do it appropriately.” He also believes it’s important for investors to work with someone they can trust. Doing so can help investors ease some of the anxiety that tends to cause sleepless nights.
“Don’t shy away; it’s not all or none,” Vitek adds. “Find an advisor that you really get along with, because it’s all about communication. They can help walk you through it. From past experience, communication and a team approach—you as the investor and me as the advisor—can help to minimize the emotional side to investing.”
Published (and copyrighted) in Suburban Life magazine, March 2025.
