A Pause in the Market: What Happened in March
March brought a broad-based pullback across the asset classes we follow. The bond market declined approximately 1.75%, while U.S. equities fell about 5%. International markets experienced more pronounced declines, with emerging markets down roughly 13% and European equities down around 10%.
As a result, client portfolios reflected these movements. More conservative allocations saw declines closer to 3%, while more aggressive portfolios experienced declines near 5%.
While these numbers can feel significant, especially in the context of larger account balances, they remain within the range of what we would consider normal market behavior.
Year-to-Date Perspective: Context Matters
Looking beyond a single month provides important perspective. Year-to-date, conservative portfolios are down approximately 0.5%, while more aggressive strategies are down around 4%.
Market volatility is a natural and expected part of investing. Periods of consistent gains can make temporary declines feel more unsettling than they actually are. However, history shows that these types of fluctuations are not only common but necessary for long-term market growth.
How We’re Positioning Portfolios
During periods of uncertainty, our focus remains on disciplined portfolio management and risk mitigation.
One of the key strategies currently in place is our stock rotation. Approximately one month ago, portfolios utilizing this strategy shifted into cash as market momentum weakened. This move is designed to help limit downside exposure while preserving flexibility to re-enter equities when positive trends re-emerge.
This is not about trying to predict the market—it’s about responding to measurable changes in momentum and managing risk accordingly.
Managing Withdrawals Strategically
Another important consideration during market declines is how withdrawals are handled.
When markets are down, selling depreciated assets can lock in losses unnecessarily. To help mitigate this, withdrawals are carefully sourced from a diversified mix of asset classes. The goal is twofold:
- Avoid selling investments that are significantly down
- Minimize potential tax implications
Even though recent declines are not historically large, this disciplined approach helps long-term portfolio integrity—especially if market volatility continues.
Staying Grounded in the Long Term
It’s natural to feel concerned during market downturns, particularly when account values fluctuate by several percentage points. However, reacting emotionally to short-term volatility can often do more harm than good.
Instead, maintaining a structured, long-term strategy allows investors to navigate these periods with greater confidence.
At ACT Advisors, our approach is built around advancing and protecting your portfolio through changing market conditions. That means staying proactive, making adjustments when appropriate, and always keeping your long-term goals at the center of every decision.
Final Thoughts
Market pullbacks like the one experienced in March are a normal part of the investment cycle. While they may be uncomfortable, they are not unexpected—and they do not change the importance of maintaining a disciplined investment strategy.
If you have questions about your portfolio or need to discuss your financial plan, we encourage you to reach out. We’re here to help you navigate both the opportunities and challenges that come with investing.
Past performance does not guarantee future results. All investing involves risk, including the possible loss of principal. Index returns are shown for illustrative purposes only and cannot be invested in directly. International investing involves additional risks, including currency and geopolitical risks. Bond investments are subject to interest rate, credit, and market risk.
