From the Desk of Kelly Ann Winget: The Economy is Volatile, What Can We Do??
II’m arriving back to Texas after a whirlwind weekend in Scottsdale with The KNOW Women (I was awarded 100 Women to Know). I was in a room with some of the most inspiring and successful women in our country, and I couldn’t help but notice that most conversation topics seemed to lead back to economic uncertainty. The best and brightest in their fields all felt the sting of market volatility, and so I thought I’d sit down and give my take on the state of our markets and what we can be doing to mitigate their chaos.
If there’s one thing I know about the financial markets in my 20+ years in the financial services sector it’s that they typically respond poorly to uncertainty. So it should come as no surprise that we have observed a downward trend during the past several weeks, as conflicting messages and assumptions about the exact size, shape, and extent of Trump’s tariff announcement kept markets in a more or less constant state of tension.
April 2 sent markets into a tailspin, with the S&P 500 losing more than 10% of its value in just two consecutive trading sessions. Since then, we have seen dramatic swings in pricing—though still with a downward bias—and some of the highest volatility readings observed since the pandemic.
Meanwhile, the fixed-income markets, though initially benefiting, price-wise, from investors’ flight to safety, gave up some of these gains as worries about the economic implications of a possible trade war led traders to factor in a less favorable inflation outlook (and, thus, a decreased likelihood that the Fed will continue to lower interest rates).
Now for those invested in traditional markets, there are a few strategies that some (the ultra connected) have employed to take advantage of the situation. The rest of us, however, have the joy of riding them out and hoping the market rebounds… eventually.
But we can’t do this every four years (or every four days as it stands currently).
Enter: the Alternative Investment space. When markets are volatile (but even in strong markets), alternative investing can provide downside protection.
Because our portfolio targets non-correlated assets in the private market, we are able to pivot quickly when policy changes or geopolitical issues arise. We are thinking about our strategy across decades, not administrations.
Investors want more control, customization, and better alignment, and that's hard to achieve through traditional models. A diversified portfolio creates less risk. An actively managed portfolio leaves room to pivot when markets struggle. Focusing on domestic infrastructure and manufacturing will always be a solid strategy. Investing in the next generation of generational business promotes growth, instead of bleeding companies dry and throwing them out with the garbage. Layering tax-advantaged opportunities throughout an investment portfolio reduces at-risk capital.
These are the things I’m passionate about (and what I think about all day everyday). In a world of economic uncertainty, there are things we can do to create a sense of strategy with our money.
Just a thought… Let me know if you want to chat more about it!
-KAW
