In Uncertain Times, Remain Steady

The stock market reacts to the news cycle – from exuberance to panic – in such an unpredictable way. This uncertainty taunts investors, as they vacillate on what to do based on the latest breaking news.

"Edge of the cliff: A top economist says the US is in a full-blown labor recession that risks spilling into the rest of the economy", Business Insider, September 5th, 2025

"The August jobs report has economists alarmed. Here are their 3 top takeaways", CBS, September 5th, 2025

"The canary in the coal mine is singing as global bond selloff raises national debt concerns", Fortune, September 3rd, 2025

These headlines are just a sampling of the many that have spooked investors over the past week, given the changing tides of the financial markets. Rewind a few weeks prior, and the headlines were mixed, offering signs of an economic expansion and of a potential recession. Fast forward a few weeks or months, and it is unknowable what the headlines will contain.

While our gut reaction to negative news is to try to protect ourselves from potential financial hardships, our reactionary nature and human psychology often make acting on such headlines a poor choice.

If people could predict when markets would crash or surge with exact certainty, then holding or selling one's portfolio to protect from economic hardship would be a no-brainer. However, acting with precise knowledge and decisiveness is not possible for the average investor, let alone top hedge funds, mutual funds, and traders alike.

We never know when the next recession will occur, when the markets will start dropping, when they will stabilize, or when the next expansion will begin. Therefore, what should the normal layperson do? Stay out of the financial markets entirely? No, instead, they should adopt a tried-and-true strategy by maintaining adequate emergency cash reserves, investing in the market, and holding for the long term.

Such a strategy is not glamorous, nor is it likely to yield eye-watering returns, but it does work. The first step, holding an adequate emergency cash reserve, acts as a flotation device for you and your family should one or more of the income earners lose their jobs. Such a safety net helps ensure you do not need to dip into your retirement savings and helps keep you out of debt.

The major investing house, Charles Schwab, best summarizes the second step of investing and holding through market cycles:

"The best action that a long-term investor can take ... is to determine how much exposure to the stock market is appropriate for their goals and risk tolerance and then consider investing as soon as possible, regardless of the current level of the stock market."

Why, you ask? Well, " It's nearly impossible to accurately identify market bottoms on a regular basis... [and] even badly timed stock market investments [are] much better than no stock market investments at all. Our study suggests that investors who procrastinate are likely to miss out on the stock market's potential growth."

During my time as a financial advisor, I have seen the results of Schwab's study confirmed by the real-world experiences of ordinary investors. While such an approach requires giving in to uncertainty and ignoring the headlines, it has consistently returned positive results for investors who stayed the course for the long term, which is consistently affirmed by academia and in the real world.

If you are unsure about implementing a long-term buy-and-hold strategy, we are here to help. At Lundeen Abrams Advisors, we regularly assist clients of various backgrounds in building a retirement savings and investing strategy tailored to their unique needs and risk tolerance. So, please give us a call and schedule a consultation with us today because we are here to hel