First Do No Harm: Strategies for Investing in a Turbulent Market

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As we move deeper into 2025, it’s clear that we are investing through a uniquely challenging and rapidly evolving economic landscape. From heightened geopolitical tensions and market volatility to shifting investor demographics and policy uncertainty, there is no shortage of headlines causing anxiety. However, with thoughtful planning, disciplined execution and a long-term perspective, these disruptions can be turned into opportunities.

Let’s unpack the state of the markets today, explore where opportunities lie and review several strategies to navigate the months ahead.

The Market in Flux: What’s Driving the Turbulence?

The US equity market outlook has changed markedly since the start of the year. According to Morningstar¹, the market has “plunged from overvalued into undervalued territory,” with stocks now trading at a 17% discount to their fair value. This sharp correction has been largely driven by fears around trade policy, especially new tariff announcements by the Trump administration, and ongoing policy unpredictability.

S&P Global² noted that “corrections in equity prices were pronounced and widespread following the initial announcement of reciprocal tariffs on April 2” and also confirmed a reduction in growth forecasts for 2025 and 2026, citing policy volatility and trade-related spillovers. Investors are also growing concerned about waning foreign appetite for U.S. Treasuries, which has contributed to a spike in yields — a worrying development for fixed income portfolios.³

While a brief pause in trade hostilities between the U.S. and China on April 9 led to a temporary rebound, markets remain “choppy” and risk-averse. David Solomon, CEO of Goldman Sachs, summed it up bluntly in a CNBC interview⁴: “The level of uncertainty is too high. It’s not productive. It’s affecting investment spending and planning, and that will have an effect on growth in the economy.”

Market Anxiety: Sentiment vs. Opportunity

Sentiment among investors reflects this volatility. The AAII Sentiment Survey⁵ has shown a marked drop in bullish sentiment, with a corresponding rise in bearish outlooks. Despite heightened investor anxiety and persistent recession fears, several top Wall Street strategists see current conditions as a long-term buying opportunity rather than a reason to retreat.

Consumer confidence has dipped, and bearish sentiment is widespread, yet fundamentals remain solid: Corporate earnings are resilient, the labor market is strong, and household balance sheets are healthy. Market pessimism is often a contrarian signal, not a forecast. Depressed sentiment has historically marked market bottoms, with investors overpricing risk and undervaluing quality stocks.

Trade tensions, while unsettling, are viewed as political headwinds rather than systemic threats. It is important to stay focused on fundamentals and avoid reactive decisions based on headlines. Target companies for investment that have strong domestic exposure and sound balance sheets and pricing power. Remember that value stocks can become increasingly attractive in conditions such as these. Volatility may persist, but for disciplined investors with a long-term view, it can present entry points into high-quality equities.

Investment Strategies to Consider Now

In light of these challenges, here are several strategies that could build resilience and optimize portfolios.

1. Maximize Roth Contributions and Consider Roth Conversions

With tax rates expected to rise in the coming years, it’s an ideal time to lock in the benefits of Roth accounts. Max out contributions to Roth IRAs and Roth 401(k)s where possible. For high-income earners, explore backdoor and mega-backdoor Roth strategies to gain access.

In addition, you may want to consider strategic Roth conversions from traditional IRAs. This allows the investor to pay taxes now at relatively low rates in exchange for tax-free growth and distributions later. In volatile markets, depressed asset values may also make conversions more tax-efficient.

2. Realize Gains Strategically

With markets trading at a discount, it may seem counter-intuitive to realize gains, but in some cases, it’s smart. Gradually realizing gains on long-held appreciated assets — especially when paired with harvesting losses elsewhere — can help manage tax exposure over time. This is especially true in light of potential future increases in capital gains tax rates.

3. Plan Early for Business Sales

If you are a business owner considering a sale in the next few years, early planning is critical. Structuring the transaction properly, managing timing and exploring charitable or estate-related structures can reduce taxes and maximize your after-sale proceeds.

4. Utilize Estate Tax Exemptions Before They Shrink

The current federal estate tax exemption of $13.61 million (per individual) is set to sunset in 2026 unless Congress acts. This makes 2025 a crucial year to take advantage of lifetime gifting strategies and wealth transfer vehicles like irrevocable trusts.

5. Adapt to a Shifting Client and Economic Landscape

2025 also brings a massive generational shift in wealth ownership. Women, millennials and Gen Z are poised to control more assets than ever before. This demographic evolution, combined with technological change, ESG preferences and geopolitical volatility, should influence how to invest going forward.

Key sectors include:

Healthcare technology: Particularly resilient and innovative.

Renewable energy: Aligned with ESG mandates and long-term sustainability.

Artificial Intelligence: Despite a short-term selloff, long-term potential remains strong.

Infrastructure: A likely beneficiary of reshoring efforts and government stimulus.

6. Reassess Risk Management and Insurance Needs

In today’s environment, where climate risks and geopolitical disruptions are on the rise, insurance protection must be part of any comprehensive financial plan. Property and casualty insurance markets have tightened, so review your policies and consider umbrella coverage to protect your assets.

7. Don’t Overlook Crypto — But Stay Grounded

While crypto remains volatile, its role as a diversifier continues to evolve. As blockchain adoption expands and tokenization becomes more mainstream, we are seeing institutional-grade custodians and platforms improve security and transparency. That said, allocate cautiously and treat crypto as a satellite — not core — investment.

Stay Focused, Stay Disciplined

In times of uncertainty, it’s tempting to retreat or attempt to time the market. But history shows that disciplined, long-term investing — paired with smart tactical adjustments — generates stronger outcomes.

By focusing on fundamentals, aligning investments with your values and goals and maintaining perspective, the investor can navigate the storm and emerge stronger. While uncertainty remains, the broader economic picture supports a cautiously optimistic outlook.

Endnotes

^1.https://www.morningstar.com/lp/stock-market-outlook?utm_medium=referral&utm_campaign=linkshare&utm_source=link

^2. https://www.spglobal.com/market-intelligence/en/news-insights/research/global-economic-outlook-april-2025?utm_campaign=Oktopost-Corporate%3A+Trade+Tensions&utm_content=Oktopost-facebook&utm_medium=social&utm_source=facebook

^3.https://www.wsj.com/articles/growing-concern-foreign-investors-lose-some-hunger-for-u-s-debt-1525080601

^4. https://www.cnbc.com/video/2025/04/22/goldman-sachs-ceo-david-solomon-the-level-of-uncertainty-is-too-high-and-not-productive.html

^5. https://www.aaii.com/latest/article/280510-aaii-sentiment-survey-neutral-sentiment-ticks-up

The information and opinions set forth herein have been prepared by Kelleher Financial Advisors, LLC (“KFA”), a U.S. Securities and Exchange Commission registered investment adviser and an affiliate of Wall Street Access, Member NYSE, FINRA, and Member SIPC. Registration does not imply a certain level of skill or training. Although the information upon which this material is based has been obtained from sources which we believe to be reliable, we do not warrant its completeness or accuracy. Any opinion or estimates constitute our best judgment as of this date and are subject to change without notice. This article is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any security or investment. All forms of crypto investing are speculative and involve a high degree of risk. Investors should be able to bear the complete loss of an investment.

Colleen Kelleher Sorrentino, CFA is the Managing Director of Kelleher Financial Advisors, LLC and Stacey P. Mankoff is the Managing Principal of The Mankoff Company, LLC.

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