By Dan Goldberg, CFA, CFP®, CAIA
Chief Investment Officer & Wealth Advisor | Partner
When Markets Get Choppy, We Need a Resilient Plan
We’ve all felt that moment of uncertainty when markets swing wildly. One spouse might rush to check account balances while the other avoids looking altogether. It’s natural to wonder if your family’s financial security might be at risk when headlines turn alarming.
Preparing ahead of time for inevitable market fluctuations is crucial. The investor experience so far in 2025 is one of the many reasons we’ve developed our “all-weather” investment approach at Diversified Portfolios.
The strategy isn’t about predicting market movements. It’s about building portfolios that remain resilient across conditions. Over time, we’ve seen it’s not just about investment management; it’s also about helping couples maintain shared confidence and clarity even in times of stress.
What “All-Weather” Really Means for Your Portfolio
As someone who recently moved to Michigan, the spring weather can drive you crazy. One day it’s sunny and 75 and I’m taking out patio furniture, and the next day it snows. While these changes drive me mad, we take the opposite approach when it comes to preparing for various financial conditions.
Financial markets work in much the same way. From 2012 to 2020, the investment climate was remarkably favorable. The financial crisis was in the rear-view mirror, and it seemed easiest to own the large U.S. technology companies for returns. But markets inevitably face turbulence—as the pandemic of 2020, inflation concerns of 2022, and tariff worries of 2025 have recently reminded us.
Our all-weather approach doesn’t try to forecast storms. In fact, we welcome stormy weather! We focus exclusively on what we can control to create more consistent results in any environment, bridging the gap between those who may want more aggressive growth and those who prioritize protection.
Three Factors That Drive Long-Term Financial Security
There is no greater financial miracle than compound interest, and our investment philosophy centers on three controllable factors that combine to allow portfolios to compound at the highest rate possible:
1. Keeping Investment Costs Low
Every dollar paid in unnecessary fees is a dollar not going toward building your family’s future. Using low-cost investment vehicles and avoiding excessive management fees allows more of your money to compound over time. That’s why we constantly evaluate the investment landscape: to find you the most cost-effective options that meet our high standards.
2. Minimizing Tax Impact
Smart tax management enhances returns without adding market risk. We implement strategic asset location, tax-loss harvesting, and structured withdrawal approaches to help your portfolio grow more tax-efficiently. This matters whether you’re supporting adult children, aging parents, or planning for your own future. We’d prefer a tax efficient 7% return vs. an inefficient 7.5% return, for example.
3. Managing Risk Through Thoughtful Diversification
The math is straightforward: If you lose 50% on $100 (now $50) and then gain 90%, you only have $95. Despite unequal percentage movements, you’re down 5%.
A 5% loss of $100, followed by a 9% gain gets you to $103.55.
A lack of focus on downside protection can devastate family portfolios, especially for those approaching or in retirement. That’s why we diversify across investments that don’t all move together, creating more consistent returns with less dramatic fluctuations—providing peace of mind for both the more aggressive and more conservative members of your household.
Navigating Market Downturns Together
Market drops are always a lifeboat drill. When markets fall, many investors panic and sell. It’s human nature, and one of the most studied psychological activities. But selling during downturns can seriously hurt your family’s long-term financial security.
Think about it—the stock market is the only place where people run the other way when things go on sale. If your favorite restaurant offered 20% off, you’d be delighted. But with stocks, people react differently.
We prepare for market volatility instead of trying to predict it. Our client portfolios are built to handle rough weather through:
- Strategic diversification across different types of investments
- Quality bonds that provide stability at attractive rates
- Regular rebalancing to maintain your ideal risk level.
This preparation lets us stay calm when others panic. It helps your family see market dips as potential opportunities instead of reasons to worry, regardless of your individual money backgrounds.
The Power of Steady Compounding for Generational Wealth
Successful investing depends on consistency and discipline, not dramatic moves, or perfect timing.
Compound interest has been called the eighth wonder of the world for good reason. By focusing on what you can control (costs, taxes, and risk), your family’s money can grow more effectively over time, supporting not just your retirement but potentially your children and aging parents as well.
This disciplined approach provides genuine confidence. With a thoughtful strategy, you can focus on what truly matters rather than market headlines.
Your Path to Financial Clarity
For our valued clients, market uncertainty doesn’t have to create ongoing worry. With our all-weather investment approach, we’re here to navigate through market storms together, providing clarity and steadfast confidence.
Not a client yet? Your financial future is too important to leave to chance. At Diversified Portfolios, we help families create investment strategies that reflect their unique values and circumstances, providing stability even during market volatility.
