How to Protect My Investment Portfolio

Thomas Wilke
Apr 5
3 min read

Updated: Apr 10

Strategies to Help Safeguard Your Retirement from Market Volatility

Stock Market in Decline — Are You Prepared?

In recent weeks, the stock market has taken a significant hit, with major indices dropping sharply and wiping out years of growth for many investors. Those who are heavily invested in equities — especially individuals in or near retirement — may now be facing a serious funding gap. Years of disciplined savings can disappear in a matter of days if your portfolio isn't properly balanced. The 2008 financial crisis took around five years to recover to previous highs, so how long should pre-retirement and retirees expect this latest crash to recover? Also, what can be done to better protect an investment portfolio, the answer is an easy pill to swallow.

Diversify with Bonds to Reduce Risk

Bonds can be a powerful tool for retirees. While they may not offer the same explosive growth as equities, they play a crucial role in protecting wealth.

Lower Portfolio Volatility: Bonds tend to be less volatile than stocks, helping to smooth returns when mixed within a portfolio. The latest crash has hardly impacted bond issues and bond funds which can still be liquidated and sold with little to no capital loss or appreciation. This is because bond valuations are more closely tied to interest rates.
Provide Reliable Income: Many bonds pay regular interest, creating predictable cash flow.
Preserve and Grow Wealth: By limiting exposure to equity market swings, bonds help protect capital.

Note: Bonds carry credit risk (the issuer could default) and interest rate risk (bond values fall when rates rise), so it’s important to choose wisely — or better yet, work with a manager who understands the landscape. By having a 60/40 or 40/60 allocation (equities to fixed income), returns can be less volatile and allow more stable growth and protection from market drawdowns, recessions, or corrections.

Insurance Contracts & Annuities: Transfer Risk To The Insurance Company

Annuities and similar insurance contracts are often misunderstood — but they can be incredibly valuable tools in a volatile market. Annuities can be structure in different ways such as differed or immediate income (receive payments later or now). They can also be tied to an index and given a participation rate along with minimum contract valuations, which means if the index falls below 0% performance, then it won't adversely impact your annuities accumulated value of investment.

Lock in Growth: Some annuities allow you to preserve prior gains, no matter what happens in the market.
Income Stream: Others provide steady income for a certain period of time or for life.
Risk Transfer: By purchasing these contracts, you transfer investment risk to the insurance company, making it a contractual obligation, not a market-dependent outcome.

Gold: A Safe Haven When Markets Fall

An allocation to gold — historically a hedge against market turmoil — can help cushion losses during a downturn. It is used as a form of reserve currency, as a metal it doesn't tarnish or corrode, its scarce, and its value rises during economic downturns because of a growing demand for safe investment.

Inverse Correlation: Gold often rises when stocks fall, helping offset equity losses.
Store of Value: Especially during inflation or global uncertainty, gold maintains purchasing power.
Portfolio Drawdown Protection: Even a modest gold allocation can meaningfully reduce the depth of losses.

Why Work with an Investment Manager?

During volatile markets, professional guidance makes all the difference. A qualified investment advisor or manager can help you:

Track Market Trends and Sentiment: Advisors monitor bull and bear markets, economic indicators, and macroeconomic shifts to make timely portfolio adjustments.
Select High-Performing Assets: Across stocks, bonds, real estate, alternatives, and more — they look for the best options available.
Smooth Out Swings: Through diversification and risk balancing, they aim to lower volatility and reduce the emotional toll of market swings.
Achieve Risk Parity: Spreading risk evenly among asset classes — not just focusing on returns.
Use Opposite Correlations: Strategically choosing assets that react differently to market events.
Adapt to the Environment: Markets are dynamic — your portfolio should be too.

The onset of today’s economic recession, fueled by escalating tariffs and global uncertainty, should be a wake-up call for every American investor — especially those nearing retirement. Now more than ever, working with a financial advisor to identify protective strategies and recovery opportunities isn’t just smart — it’s essential.