My Stock Portfolio Is Down 25% – Here’s How I’m Navigating Market Volatility

If your personal portfolio is in a bear market (defined as a 20% decline from peak levels) right now, do know that you’re not alone. And while the stock market (think the S&P 500 and Nasdaq 100) has regained close to half of the ground it lost from peak to trough, it’s unclear where stocks will go after the halfway point. Indeed, a revisitation of all-time highs or 52-week lows seems both pretty likely.

And the next move will probably hinge on the next moves of Trump with his tariff plans. Either way, it’s a risky time to jump out of markets right now, even if it’s tempting to cut one’s losses before the next wave of selling hits. Before you hit the sell button over recession fears or because of some bearish news story you’ve recently read (there’s no shortage of those amid the Trump correction), it’s important to take a step back and proceed forward in a manner that doesn’t entail emotionally-charged irrationality.

The market regains half the ground it lost. Is it a calm before the storm?

Indeed, the markets have really calmed in the past week or so, with stocks putting together a nice win streak. And while it feels like a calm before a storm, I think investors who are doubting the sustainability of the recent weekly gains should think about strategically repositioning in a gradual way to help them better navigate the volatility ahead. Remember, investing through turbulent markets fuelled by great uncertainty should be viewed as a marathon rather than a short sprint.

You don’t need to cut your plow all your tech stocks into names within the staples, utilities, healthcare, and other defensive sectors. Instead, you can gradually trim here and there over the course of many months and quarters, as you aim to gradually achieve an allocation that’d put your portfolio in a more comfortable spot as Trump policies pave the way for tougher sledding.

In any case, this Reddit user, who recently outlined their strategy for navigating tariff-induced volatility, seems to be in a rather difficult position, with a portfolio that’s “mainly tech stocks,” with a whopping 80% allocated to the hard-hit sector alone. Indeed, it’s this considerable tech exposure (Nvidia (NASDAQ:NVDA) stock is their largest holding) that’s cratered their portfolio, which is still down 25%, while the S&P is halfway to a recovery, now down just shy of 10%.

Don’t overreact either way! Play the long game.

At this juncture, dumping tech for defensives could be a good move if we’re in nothing more than a bear market rally. However, if this rally is sustainable, trimming tech could leave ample timely gains on the table as the high-multiple tech titans (think the Magnificent Seven) lead the rest of the market higher. Indeed, if Trump is ready to wheel and deal (he believes America will have a trade deal with India), it may very well be too late to reposition.

In any case, I think timing the market is a terrible idea and would encourage them to diversify gradually over time until they have a sector allocation that wouldn’t put their portfolio in the blast zone once the next sell-off hits. Indeed, bringing aboard a financial advisor could be a good idea if our Reddit user needs a bit of assistance as volatility continues off the charts. For the most part, I think steadying the sails and staying the course remains the best option.

Of course, if our Reddit user is fine with experiencing amplified damage on the way down for a shot at amplified upside come the next market rally, perhaps the best move is to sit on one’s hands as the market tanks or skyrockets on any given day based on some piece of horrifying or euphoric news item.

In any case, I’d not be panicked out of a position unless one can’t handle the volatility and has timely expenses coming due at some point in the future. I’d treat the plunge as a lesson learned and an opportunity to reassess one’s risk tolerance moving forward. As for selling after a loss, I’d say that carries a great deal of risk of missing the next upward move.

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