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If it feels like there’s been ongoing turmoil in the markets lately, you’re not imagining it. Between persistent inflation concerns, shifting interest rate expectations, and continued geopolitical tensions, investors have had no shortage of reasons to feel uneasy, and the markets have responded in kind.
For investors, these periods of uncertainty often stir up anxiety and trigger the urge to act. When portfolios dip and headlines turn negative, it can feel like doing something — anything — is better than sitting still.
That’s where advisors have to dig in.
Our role isn’t just to manage assets; it’s to help clients stay grounded. We remind clients that investing is a long-term journey, and short-term volatility doesn’t have to knock them off course. But to do that effectively, we need to offer more than reassurances. We need to come to the table with perspective, discipline, and strategies that help clients see the opportunity beyond the uncertainty.
While market pullbacks are rarely welcome, they can open the door to meaningful planning moves, if approached thoughtfully. Here are five smart strategies advisors should be discussing with clients now that markets are on edge.
1. Time Roth conversions when values are down
A market pullback can be a great opportunity to execute on a full — or partial — traditional IRA to Roth IRA conversion. Here’s why: When converting the traditional IRA, any deductible contribution portion — and earnings — will be taxed as ordinary income. When asset values are lower, the tax cost of the conversion is also lower. That means you can make the conversion and stay invested — where future growth and withdrawals (if qualified) are tax-free — at a lower upfront tax cost.
For the right investor, this can be a powerful long-term tax strategy. Many clients enjoy the flexibility in retirement of not being forced into more taxable income than they need when they hit their required minimum distributions (RMD) from their traditional IRAs. It’s important to always consult with a tax advisor or CPA before executing a conversion. Done thoughtfully, a conversion can turn a downturn into a meaningful long-term advantage.
2. Think beyond December for tax-loss harvesting
Tax-loss harvesting is often treated like an end-of-year chore, but it’s actually something to consider implementing throughout the year, especially when markets are down.
If you hold investments in taxable (nonretirement) accounts that have declined in value, selling them to realize a loss can offset capital gains elsewhere, or down the road, and reduce your taxable income (up to $3,000 annually, with losses above that carried forward indefinitely, under IRS rules).
The key is to reinvest the proceeds in a similar — but not identical — investment to maintain market exposure while avoiding wash-sale rules. It’s especially useful for those holding individual stocks or ETFs, and it works best when it’s part of an ongoing process, not a last-minute fix.
3. Rebalance with purpose, not emotion
During volatile periods, it’s easy to lose sight of your target allocation. When markets move quickly, your portfolio may become unbalanced, weighted too heavily in one asset class and too lightly in another.
That’s where rebalancing comes in. By selling what’s overweight and buying what’s underweight, you bring your portfolio back in line with your asset allocation target. This may feel counterintuitive — buying more of what’s recently dropped — but it’s often the most disciplined thing you can do. To help clients execute on this and block out the noise, we like to create investment policy statements to define the rebalancing triggers.
If jumping back in all at once feels overwhelming, consider dollar-cost averaging into the market. It spreads out your reinvestment over time and reduces the stress of trying to “pick the bottom.”
4. Use volatility as a reason to fund long-term accounts
Choppy markets can serve as a helpful nudge to take care of long-term financial housekeeping, especially when it comes to funding tax-advantaged accounts like IRAs, Roth IRAs, and 529 college savings plans.
Because these accounts are designed for the long haul, making contributions when prices are down can position you to benefit from the recovery. With an inherent long time horizon, you can stress less about the short-term swings in the market.
It’s also a simple way to stay proactive, especially if you’re feeling stuck or unsure during periods of market volatility.
5. Sometimes, staying put is the smartest strategy
Not every market event requires a response. If your portfolio is well-diversified and built around your time horizon and risk tolerance, staying the course can be the most effective move.
Ultimately, it’s not about ignoring what’s happening, it’s about recognizing that reacting emotionally can do more harm than good. Selling in a panic or jumping from one strategy to another tends to lock in losses and miss the recovery.
If you’ve taken the time to build a thoughtful plan, trust it. And if market volatility is making you second-guess that plan, use it as a moment to revisit and refine it, not abandon it.
In closing
Market volatility isn’t comfortable, but it’s also not uncommon. These swings come with the territory of long-term investing, and what matters most is how we, as advisors, help our clients respond. This is when our value is most evident. It’s not just in managing money, but how we are able to help clients make sound decisions when their instincts may be telling them otherwise.
Whether it’s executing a tax-smart Roth conversion, harvesting losses with intention, rebalancing into opportunity, or simply staying the course, volatile markets can be used to a client’s advantage. Even advising a client to hold steady — especially when headlines urge action — can be one of the most powerful choices we help them make.
At SoundRidge, we believe periods of uncertainty are best met with clarity, discipline, and a plan. These moments are a chance not only to reinforce strategy, but to reinforce trust. If your clients are looking for direction right now, it may be time to revisit the roadmap; not because the plan has changed, but because this is when the plan matters most.
Charles Princiotto is the president and co-founder of SoundRidge Private Wealth.
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), member SPIC. SoundRidge Private Wealth is a separate entity from WFAFN.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
