As tariffs take effect and the stock market drops, many individuals wonder how to handle their 401(k) investments. Erin Shaw, market manager of J.P. Morgan Private Bank, offers her expertise in navigating these uncertain times.
The current economic climate has raised many concerns for individuals looking to safeguard their investments. Shaw notes that many clients are understandably anxious about how market volatility, caused by tariffs and inflation, could impact their financial future.
“The primary concerns right now have been recent tariffs and the talk of tariffs and what that’s going to look like,” Shaw said. “The biggest concerns I’m hearing are ‘When is there going to be certainty with what’s going to happen? How low can it go?’ These are all concerns that come up whenever you see market volatility.”
In light of these challenges, Shaw advises clients to stick with a long-term strategy. While short-term market fluctuations can be unsettling, she emphasizes the importance of avoiding reactive decisions that might jeopardize future gains. Instead, Shaw recommends taking a measured approach to investment strategies that account for both present uncertainties and long-term goals.
“Some might be closer to retirement. Some might just be starting in the workforce,” Shaw said. “If you’re going to invest, you always need a long-term view because markets tend to go in different cycles.”
Misconceptions often arise during times of economic uncertainty. Shaw explains that many believe the best course of action is to pull back from investments during turbulent times. However, she stresses that such a move can often lead to missed opportunities for growth once the market stabilizes.
Regarding 401(k)s, Shaw highlights several critical considerations for individuals looking to make informed decisions in today’s market. In particular, she encourages people to review their investment allocations and ensure they align with their risk tolerance and time horizon.
“Make sure that you have a financial goal with your advisor, and that helps you determine how you’re allocated,” Shaw said. “If you have a plan, look at it to say, ‘Am I too over-concentrated in this certain company? Do I have too much in this asset class? Does it make sense? Can I still achieve my goals?’ Because any plan that you do typically will incorporate volatility in their inflation.”
Shaw advises a more conservative approach for those closer to retirement, with an emphasis on stability and income-producing assets. On the other hand, individuals earlier in their careers may have the flexibility to take on more risk, capitalizing on the potential for higher returns over time.
“Make sure that you have a financial plan,” Shaw said. “It is essential because it helps you frame how you’re going to achieve your goals.”
As market conditions fluctuate, some 401(k) allocations may be more vulnerable than others. Shaw points out that individuals should carefully consider their investment choices, avoiding overly aggressive allocations that could lead to significant losses in times of uncertainty. Conversely, leaning into more diversified, resilient options could help navigate volatile markets.
With inflation and rising interest rates at the top of many investors’ minds, Shaw suggests several strategies to help protect portfolios against these pressures. She emphasizes the importance of diversification and suggests considering fixed-income investments that can provide stability amidst economic fluctuations.
“We test the portfolios for resiliency, but you don’t want to have all your eggs in one basket,” Shaw said. “You want to make sure that you stay well diversified.”
For those looking to better educate themselves on managing their 401(k) during turbulent times, Shaw recommends taking advantage of available resources like financial planning tools and online investment guides and speaking with a financial advisor to ensure that investment strategies remain aligned with their financial goals.
Shaw believes that the next 6-12 months could bring continued uncertainty, particularly as global events influence the economic landscape. However, she urges investors to remain adaptable and learn from past periods of economic volatility to inform their strategies today.
“Don’t panic and try to stay focused because it’s easy for you to start listening to the news and what other people are telling you,” Shaw said. “I would say just try to take a long-term view. Time heals.”
For more resources, visit jpmorganchase.com.
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Contact Health & Environmental Reporter Hanna Rauworth at 317-762-7854 or follow her on Instagram at @hanna.rauworth.
Hanna Rauworth is the Health & Environmental Reporter for the Indianapolis Recorder Newspaper, where she covers topics at the intersection of public health, environmental issues, and community impact. With a commitment to storytelling that informs and empowers, she strives to highlight the challenges and solutions shaping the well-being of Indianapolis residents.
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