It’s common for investors, especially those in or near retirement, to pause and consider whether their financial approach still aligns with their goals. If the market feels shaky, then it becomes even more important to do so. Reviewing your 2025 investment strategy doesn’t always mean making major changes, but it may help you feel more informed and confident about your situation and next steps.
Whether markets are steady or shifting, checking in on your investment mix and timeline can be helpful for long-term planning. Here’s what to consider.
Putting Market History into Context
It’s normal to want to take a second look at your investments when markets feel uncertain. However, history shows that ups and downs are part of long-term investing and that markets tend to recover from past declines. For example:
- After falling more than 22% in a single day in the 1987 crash, the market recovered within two years and continued to grow during the 1990s.
- During 2008, the market fell dramatically before recovering in the 2010s.
- The COVID-19 downturn in early 2020 caused a market drop, but it had a much shorter recovery, rebounding by 2022.
Over the past three decades, the long-term trend has been upward. In that time, the S&P 500 has had an annual growth rate of about 10% (not adjusted for inflation).
Taking a long-term perspective can help put short-term uncertainty in context. While past returns don’t guarantee future ones, historical data shows that recoveries often follow downturns, and sometimes, they’re stronger and faster than expected.
Reviewing Your Strategy Doesn’t Mean Starting Over
When the market feels unpredictable, you may wonder whether your investment approach still fits your needs. But reviewing your 2025 investment strategy doesn’t mean you have to make big changes. In many cases, it’s just a chance to check in on your current plan and confirm that it aligns with your goals, time horizon, and comfort with risk.
Some investors review their portfolios periodically, like once a year or after a significant life change, to ensure everything’s still on track. Others may see times of market volatility as a reminder to revisit their strategy, even if they ultimately decide to stay the course.
If you haven’t looked at your investment mix in a while, consider whether your current approach still reflects what you want it to do. Ask yourself:
- Are your investments aligned with your retirement timeline?
- Have your risk tolerance levels changed?
- Have your income needs or life priorities shifted?
Answering questions like these can help you determine your next steps. Afterward, you may find you only need to make minor adjustments, or you may feel confident continuing your current plan.
A Few Approaches to Consider
If you’ve decided to take a closer look at your portfolio, here are a few common strategies to explore. These approaches aren’t one-size-fits-all but may help you assess whether your investment mix still fits your needs.
Rebalancing
- Over time, some investments may grow faster than others; shifting your original asset mix and rebalancing can help bring your portfolio back in line with your goals and risk levels.
- You may want to rebalance on a set schedule, like once a year or in response to market changes or life events.
Diversification
- Holding a mix of different types of investments, such as stocks, bonds, and cash (or cash equivalents), can help reduce overall risk.
- Diversification doesn’t prevent loss but can help smooth out periods of uncertainty by spreading risk across different asset types.
Risk Tolerance
- Your comfort level with risk may change over time, especially as you age.
- If market swings keep you up at night, consider revisiting your investment strategy and adjusting it to reflect your risk tolerance.
You don’t need to change everything; instead, just ensure your investment approach still reflects what you need and are planning for in retirement. Speaking with a financial professional can also help guide you through uncertain times and prepare for the future.
Avoid Letting Emotions Drive Decisions
Market ups and downs can bring out strong emotions, especially when you’re in or nearing retirement and relying on your investments to support your lifestyle, but making big decisions in the moment based on fear or uncertainty can lead to outcomes that don’t align with your goals.
Instead of focusing on short-term headlines, it may be helpful to pause and ask yourself:
- Am I reacting to headlines or responding to a real change in my circumstances?
- Do I understand how this decision reflects my long-term goals?
- Have I taken the time to review my full financial picture?
Even during periods of uncertainty, focus on what you can control. Reducing debt, growing savings, or adjusting how your portfolio is allocated can help keep you grounded and avoid making rash decisions that may not serve your long-term needs.
You Don’t Have to Navigate It Alone
Whether you’re making adjustments or reviewing your current plan, it’s okay to take your time and ask for help when you need it. A thoughtful, steady approach can help you feel more confident in your financial decisions, no matter what the market is doing.
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