Why September's Swings Don't Affect Your Plan
September has a reputation. Somewhere along the way it earned a name as a rough stretch for markets, and every year the headlines are happy to remind you. You'll see the charts, the ominous phrasing, the historical averages pulled out to prove a point. It's easy to read all of that and feel your stomach tighten a little.
In a shaky market, though, the market itself is rarely what does the lasting damage. What people do in response usually matters more. That might mean selling in a panic, keeping everything in cash until the news feels calmer, or giving up on the plan the first time it gets uncomfortable. These moves can feel responsible while you're making them, but they often cause more harm than good.
A chart from BlackRock lays this out well. A $100,000 investment left alone from January 1, 2006 through December 31, 2025 grew to $806,201. Miss just five of the best days over those twenty years, and that same $100,000 ends up at $497,945. The catch is that the best days tend to land right after the worst ones (per CNBC on April 7, 2025). People who step aside to wait for things to "normalize" are often out of the market for exactly the days that drive the recovery. That gap can add up to hundreds of thousands of dollars in returns that never happened.
Volatility is not a malfunction. It's part of how markets generate the returns that make long-term investing worthwhile, and the same forces behind the bad days are behind the good ones. A market that never dipped wouldn't reward patience the way a real one does.
The rough stretches will keep coming. The market will get volatile again at some point, and that part isn't really in question. What no one can tell you ahead of time is when it will happen or what will set it off, and anyone who claims to know is guessing. We can say, though, that downturns are a normal, recurring part of investing. Building a plan around that is a very different thing from being caught off guard by it every year.
The cost of forgetting this is well documented. The investors who have fared worst over the years were rarely the ones who stayed put through a bad patch. They were the ones who jumped out when things looked frightening and climbed back in only after the recovery was already underway, missing the rebound they had been waiting for and paying for the exit in returns that never showed up.
Preparing for volatility ahead of time
Staying invested gets a lot easier when the plan was designed for turbulence from the start. That's the whole idea behind matching your money to when you'll actually need it.
Money you'll need soon is invested differently from money that has decades to grow. The dollars covering this year's spending sit in cash and money market funds, where a rough month in the market doesn't reach them. The next six to nine years of expenses are covered by fixed duration bond funds, so the money you'll actually draw on in the near and middle term isn't tied to the daily swings of the stock market.
Bonds aren't entirely immune to price movement. If the interest rate environment shifts, the value of those bond funds can fluctuate. Because we hold the bonds to maturity, we generally expect to realize the anticipated yield. A change in price along the way doesn't change what a bond pays out when it comes due, so the income those years rely on stays intact.
The longer-term dollars stay invested in the market, with room and time to ride out exactly the kind of dips the September headlines love to dwell on.
That setup changes how a scary week actually feels. When the news gets loud, the money paying for your life isn't the money that just dropped. You're not forced to sell at a bad price to cover something you need, which is the move that turns a temporary decline into a permanent loss. The plan accounted for volatility before it arrived.
More often than not, the right response to a scary week is to do nothing on purpose. If a stretch of headlines has you second-guessing, that's exactly the moment to call us before you act.
This article is for informational purposes only and is not investment advice. It does not predict market performance or recommend any specific action. A bucket-based framework is a planning approach and does not guarantee against loss or ensure a profit. Past market patterns do not guarantee future results. Please reach out to us about your specific situation before making any changes to your plan.