Maintaining Financial Wellness During Market Turmoil

The economy has its ups and downs, but, with good planning, your financial situation doesn’t have to suffer. Recent market turmoil has many business owners and individuals worried about their financial security. Now is the time for proactive steps to maintain financial wellness.

Don’t Let Panic Guide Your Investment Decisions

When stock prices plummet, investors become understandably nervous. No one likes to see their portfolio values tumble. However, it’s important to think carefully before making any decisions you might come to regret.

It’s impossible to predict what the market will do next, but history should provide some comfort. Morningstar says the stock market has crashed – meaning the market dropped by at least 20% – 19 times over the last 150 years or so. In every instance, the market has recovered and gone on to reach new heights.

This means that, if you don’t need your funds in the near future, you might like to sit tight and wait out a market crash. You might even consider making additional investments to take advantage of the low prices or to diversify your portfolio. On the other hand, you may decide you want to sell certain investments or rethink your current investment strategy. Just make sure you’re doing so with a financial strategy in mind to avoid giving in to panic.

Prepare for the Worst

The economy will improve eventually, but things could become worse before they get better. A CNBC survey found that 60% of CFOs think a recession will occur in 2025. The following steps will help you prepare:

• Bolster your emergency savings. An economic downturn tends to bring layoffs and reduced spending, hurting both workers and business owners. This is a good time to ensure you have enough savings to get through an unexpected financial hardship. Individuals and families should consider whether they have sufficient emergency savings. Small businesses may likewise benefit from increased cash reserves, in case revenues drop.
• Cut costs where possible. Both individuals and business owners should consider tightening their budgets. For individuals and families, this may involve cutting back on luxuries. For business owners, it involves focusing on marketing activities with the best ROI or negotiating lower costs for rent and supplies.
• Make sure your money is safe. Bank failures are rare, but they are possible. The FDIC says one bank failure occurred in January 2025, two in 2024, and five in 2023. The FDIC insures deposits, but keep in mind that the insured amount is limited to $250,000 per depositor, per insured bank, per ownership category.

Protect Your Assets with an Insurance Strategy

If you’re hit with a personal hardship in the midst of an economic downturn, recovery may be extra challenging. The right insurance strategy will help you protect your assets.

In addition to the personal insurance staples like homeowners, car, life, and health insurance, you may want to consider additional coverage types. For example, if you have a dog or cat, pet insurance could help you manage unexpected veterinary care.

Insurance policies are also critical for small business owners. A ransomware attack that shuts down your operations, a natural disaster that forces you to evacuate, or a lawsuit alleging that your company caused harm would be bad under the best conditions. When revenue is down, though, any of these scenarios could be catastrophic. Consider whether you have enough coverage to guard against lawsuits, cyberattacks, and other unforeseen losses.

Work with a Financial Planner

The above is not investment advice. If you want financial and investment advice – a smart idea any time but especially during periods of economic uncertainty – work with a financial planner.

A financial planner can assess your financial situation and portfolio to provide you with investment advice and asset protection strategies that cater to your specific needs.

Did you know that Heffernan Insurance Brokers offers financial services? As we are an independent firm and fiduciary, you can count on us for objective guidance that puts your best interests first. We offer portfolio review and management, asset protection strategies, estate and financial planning, investment advice, insurance planning, and more. Our experts can help you navigate market turmoil and economic uncertainty with confidence. Learn more.