How We Invest in This Volatile Market


As you have probably read in the news that the financial markets worldwide are pretty volatile recently. The S&P 500 index has lost more than 18% of its value year to date. To investors who want to seek safe shelters in the bond market, the sad news is that you most likely have lost over 9% year-to-date if you invest in a typical inter-medium term U.S. bond fund. Then, you may wonder what caused the volatility and how to invest in such a volatile market?

There are some unique factors combined to contribute to the market losses for investors:

  • Federal Reserve aggressively raising interest rates plus the reverse of its “QE” because of rising inflation in the U.S.
  • Supply chain disruptions due to COVID-19 lock downs
  • Rising commodity prices due to the uncertainties of the Russia – Ukraine War
  • Potential slowdown of the growth of world economy

How to invest in such an economic environment? Let me tell you how we help our clients invest in this kind of market.

We use an investment process that we call goal-driven, life-stage based investing.  First of all, investing is highly personal. That is why we design individual investment policy for each of our clients. First, we help clients define and prioritize their goals. Then we help them divide their goals into two big categories: short-term or long-term. And then, we further categorize these goals into “needs”, “wants” and “wishes”.  After we really know our clients’ goals and situations, we build each client’s strategic investment portfolios for long-term success. We select investment products to match their goals and life-stage they are in currently, taking into consideration their risk capacity and risk tolerance. Every year, our firm conducts macroeconomic conditions analysis as part of our evidence-based, data-backed investment research to design tactical investment strategies for the current market conditions.

During times like what we have recently been experiencing, we communicate with our clients, review with them their financial plans and explain to them the market impact on their plans. Knowing that they have sound financial plans in place, our clients are more confident that they will be able to make decisions rooted in reasons, not emotions.