The financial markets’ winds are always shifting. That can make investing feel more like a roller coaster than a reliable path to building wealth. So how should everyday investors navigate uncertain times? We asked Chartered Financial Analyst Jeff Gordon and Certified Financial Planner Darren Koch at Steigerwald, Gordon & Koch Wealth Advisors in Leesburg.
Keep a Long-Term Perspective
Smart investing isn’t about reacting—it’s about planning. An emotional reaction in the heat of the moment can do more harm than good.
"One helpful way to look at it, and one thing that we do internally here, is to look at headwinds and tailwinds,” Gordon said. “We understand that there are things like tariffs, geopolitical events, and inflationary trends, but we balance that with potential tax cuts, Federal Reserve policies, and industry growth.
"Election cycles or six sigma events, as we call them—whether they be a pandemic or a global financial crisis—they’re going to happen. But sometimes the biggest volatility moments create the best opportunities.”
Even when one market sector is down, others might be performing well.
“Since around the midpoint of last year, we’re seeing a lot more inclusion, in terms of different sectors that are doing well,” Gordon noted. “There are healthcare names, there are financial names, there are industrial names which are reporting better earnings than they were a year ago.”
Instead of reacting to every market-moving headline, focus on the economy’s fundamentals and your long-term plan.
Understand What You Own
If you invest in a stock, take time to understand what that company does and how it makes money. If you prefer funds, learn about asset allocation and risk level.
For those new to investing or looking for a simple way to diversify, index funds, mutual funds, and exchange-traded funds (ETFs) can be great options. "These allow investors to make small contributions over time into a diversified basket of stocks without having to research 40 or 50 companies on their own," Koch explained. "As you accumulate assets, you can create your own specific, diversified portfolio that's based on your own risk tolerance and personal situation. But starting with index funds or ETFs can be a great way to begin."
A properly diversified portfolio can help you weather market storms by ensuring that all your assets are not concentrated in a single stock, industry, or asset class.
Automate Your Investing
One of the easiest ways to build wealth over time is to invest consistently, even if you’re only making small contributions.
“Automatic investing plans and the push to have people automatically enrolled in 401(k) plans at work are all positives,” Gordon said. “Making it automatic where you almost don’t even think about it is very important.”
Track Your Finances and Manage Debt
“Everything that’s on your balance sheet and your cash flow statement ultimately feeds into your overall financial picture,” Koch said. “Investing is one piece of the overall pie.” Tracking your income, expenditures, and debt can reveal opportunities to economize. Then set a date each year to take a deeper dive on your overall financial picture and tweak as needed. And get a handle on high-interest debt, like credit cards, which can quickly erode your wealth.
Build Your Financial Team—And Ask Questions
What should you be asking your financial advisor right now? Koch suggests, “Based on my needs, how are we managing through this current market environment?” to assess whether your investment strategy aligns with your personal goals and risk tolerance.
Koch and Gordon also stress the importance of understanding how your advisor gets paid. Some receive commissions from selling annuities or insurance, so ask about that. Fee-only advisors, like those at Steigerwald, Gordon & Koch Wealth Advisors, might charge a fee based on your total assets, by the hour or plan, or through a retainer. Their advice won’t be influenced by potential commissions from insurance or annuity sales. Check napfa.org to find fee-only, fiduciary financial planners.
Steigerwald, Gordon & Koch Wealth Advisors also are fiduciaries, meaning they have a duty to act in their client’s best interest—a critical factor when choosing an investment professional. Build a financial team—CFP, CFA, CPA, estate-planning attorney—who can provide a comprehensive view of your financial roadmap.
Regular check-ins, at least once or twice a year, can help your financial plan stay on track.
“One thing we do as a firm is send out a weekly communication to clients, which basically talks about economic events that happened and how it’s going to affect their portfolio,” said Gordon.
“And at the end of each meeting, we ask clients, ‘If we don’t hear from you, when would you like us to reach out to you?’ That way, they dictate the frequency of communication,” Koch said. “You want to feel that you can ask questions without hesitation and your advisor truly listens and understands your goals. A good advisor should make you feel welcome, not like you’re bothering them.”
For more information, visit sgkwealthadvisors.com.
Instead of reacting to every market-moving headline, focus on the economy’s fundamentals and your long-term plan.
“You want to feel that you can ask questions without hesitation and your advisor truly listens and understands your goals."