Here’s How To Adjust Your Investment Strategy for the Rest of 2025

This is how my household is adjusting our investment strategy for Q2-Q4 2025. The SEO meter will be red if I don’t comply with its naming conventions, my apologies upfront.

A few people reached out asking and pleading for investment guidance. This is for the five people. I hope this adds clarity during the worst days in the market, the noise, and the random best days. Besides I’m not going to pretend that a lot of people reached out to me.

As of Q4 2024, Black and Brown Gen-Xers and Millennials owned $0.87 Trillion. This might sound like a high number, but this is just 1.42% of the total ownership in equities, mutual Funds, and retirement contributions ($61.35 trillion). My peers don’t understand what’s going on in the market. Likely, they don’t have any money invested.

For those who are invested, at this rate, it’s hard to predict what will happen next. When we saw President Trump and Melania’s official White House pictures, we should have known the year would be different. Alas, we are here now, knee-deep in tariff/trade wars, DOGE-inspired federal layoffs, and a soon-forgotten DEI witch hunt.

The uncertainty about the direction of US policy weighed heavily on financial markets during Q1. The U.S. equity sectors, Consumer Discretionary and Information Technology fell more than 10%. Energy carried us through with 10% followed by Health Care (6.5%) and Consumer Staples (5.2%). If we continue this way, we are headed toward a recession in Q2, which will be announced in Q3. All isn’t lost, since recessions are part of the business cycle. At this rate, hold on for as long as possible.

Words Mean Something to Your Investment Strategy

Contrary to popular opinion, words still mean something. Especially in the financial space, it’s easy to get confused about Basis Points (aka fractional interest rate increases), market movement (Bear and Bull), Quantitative Analysis/Easing (QA and QE), and market sectors.

There is no time like the present to enhance your financial vocabulary. Here’s a quick definition of an index. A stock market index is “a measure of the performance of a stock market, or a part of it, by tracking the changes in a set of stocks. It’s essentially a basket of stocks that represent a particular market or economic sector, and it’s used to gauge the overall performance of that market.” 

On April 3rd, the Nasdaq Composite (NASDAQ) index lost 1,600 points. This was the worst sell-off since the start of the COVID-19 pandemic. The NASDAQ tracks the performance of nearly 100 of the largest and most actively traded stocks. It features big names such as Apple, Meta, Nvidia, etc. Generally, it’s a mix of technology, consumer, and big-volume companies.

Concurrently, the Standard and Poor’s 500 (S&P 500) lost 6.65% of its value, nearly initiating a trading curb. The Dow Jones Industrial Average (DOW) represents the 30 most prominent US companies. The DOW fell 1,679 points or 3.98%. The Russell 2000 (companies, as the name suggests) led losses by falling 6.59%.

We entered a Bear Market cycle (a drop of 20% from the high, November 2024). To keep that simple, the bear is the negative side and the bull charges upwards. In some instances, some stocks into their Correction territory, a decline of 10% or more from recent highs. All of this prompted social media influencers to say Buy the Dip, mainly grab stocks while they are in discount mode. Hope, this helped.

Make My Portfolio Great Again Strategy

President Donald Trump’s announcement of sweeping tariffs on imports, dubbed “Liberation Day” was an unmitigated global disaster. The effects of Liberation Day will be felt through the next decade. As such, the markets will rebound but the future is a bit dimmer for it.

The best you can do now is stick to an investment strategy that aligns with your goals and long-term outlook. If retiring to the basement of your kids’ home is a plan with less than $1.5k per month in social security, there’s a fair chance that you can do nothing. However, if you want to live off at least $5k per month (adjusted for inflation), you will need to do more.

The average American couple (aged 35-44) will need more than $1.8 million to retire comfortably. With a 25-year runway, they would have to sock away at least $1,750 monthly in the market. A combination of 401ks and IRAs is a great fit to reduce current taxes with a growth of 8% historical average yearly. As of now, the median retirement savings for 35-44 stands at a modest $45,000.

We really can’t afford to mess this up. Especially, when failure means living in the basement.

Here are the five principles that our household will hold onto through Q4:

1️⃣ I’m worried about some of you

When issues strike, there are too many hurried market reactions. These can turn into massive financial mistakes. Far too many are enamored with get-rich-quick schemes. And even more want wealth to consume on bills owed and junk you don’t need. Stop trying to fulfill your worth by buying stuff. It won’t work and it’s expensive AF.

Contrary to popular belief, it’s ok to sit down. Read a book. Exercise. God forbid you attempt to simply improve yourself holistically.

2️⃣ Cash Reserves can help

Recently my wife and I are simply building our cash reserves. I think we have about $20k but we will keep building. I have a sinking suspicion that the market will be this way through mid-July. It might even be a down year at the end. So I’m in no rush when the Fidelity money market is yielding 4.05%. Seriously no rush. We needed more cash positions anyway.

Most Americans don’t have a plan for a financial emergency. Please don’t volunteer to be that person.

3️⃣ Keep It Steady with the DCA Strategy

Furthermore, this doesn’t mean that we are Dollar Cost Averaging (DCA) into our 401k per usual. Same allocation same energy. Our 401k contributions help cut our taxes by $10k while generating $10k matching contributions. Matching over 30 years can compound. Even $3,000 or $250 per month which is the average 401k match is worth $425,528.24 (over 30 years at 9%).

It’s a win-win even in a down year. Sometimes, you have to stick with the simple approach to things and turn off the news.

4️⃣ Stop and Don’t Panic in an Emergency

Don’t panic sell or scam your way into a losing position. Whole life Insurance salespeople or IUL slick talkers are working hard to part you from your dollars. They love moments of investment uncertainty to mix in fear into how they lie to you.

Case in point, on April 9, 2025, the U.S. stock market experienced a historic rally, marked by some of the largest one-day gains ever recorded, particularly for the Nasdaq Composite, which had its best day in 24 years.

5️⃣ Recommendations aren’t as good as actions

It’s your money but I wouldn’t recommend pulling money from your 401ks and IRAs. They are age-restricted retirement center accounts. They exist so you don’t eat cat food in retirement. Taking your money out to play a game of chance with scammers, will hurt you in multiple ways. You will be hit with a 10% penalty fee and an extra 10% taxes since it will be added as ordinary income.

But hey I’m just the neighborhood finance guy who studied taxes and became a millionaire by 40. If you think you know better, I’m not stopping you. What you do, doesn’t hurt my pockets. In the end, the results of your financial strategy will be based on your actions.

Good luck.

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Lawrence Gonzalez

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