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Six Ways to Protect, Preserve and Restore Your Wealth in Any Economic Environment

Investors face ongoing economic volatility, particularly related to government fiscal policies. So, it’s essential you adopt strategies that go beyond conventional advice to protect, preserve and restore your wealth. 

Below are six practical approaches — customized for today’s financial landscape — that can help you navigate uncertainty, protect your assets and position your portfolio for long-term growth.


1. Diversify with Alternative Investments

Traditional portfolios may not offer sufficient protection in turbulent markets. Incorporating alternative investments1 can add a layer of defense and help smooth returns when stocks and bonds are under pressure. Consider these strategies:

  • Market-Neutral Funds: These funds balance long and short positions in stocks so gains in one area can offset losses in another.2 Investors can profit from either an increase or a decrease in stock prices using this strategy. This might lead to steady performance regardless of market direction.

  • Managed Futures: These investments are trade contracts across commodities, currencies and other markets that profit from both upward and downward price movements.3 These investments typically perform independently of traditional stocks and bonds, making them valuable for portfolio protection and diversification.

  • Long-Short Equity Strategies: Investment managers take long positions in (or buy) stocks they expect to increase in value while simultaneously shorting (selling) stocks they predict will fall in price.4 They do this attempting to profit from both market movements while reducing overall portfolio risk.

Each of these approaches works differently than a plain stock-and-bond mix. Talk with your financial advisor to see whether these or other alternative investments might fit your risk tolerance and goals.


2. Consider Leveraging Safe-Haven Assets

Assets like gold and U.S. Treasuries have long served as hedges against inflation and market instability. Gold prices recently hit new highs5 as investors sought stability during uncertain economic times.

  • Gold & Precious Metals: You don’t need bars or coins. You can buy shares of a gold ETF or invest in mining companies to gain exposure without the storage headaches.6

  • Treasury Inflation-Protected Securities (TIPS): These U.S. government bonds adjust their principal with changes in the Consumer Price Index (CPI), helping protect your investment from inflation. TIPS are available in 5-, 10- and 30-year terms.7

  • Short-Term Treasuries and Cash: Holding cash provides immediate access to funds, while U.S. Treasury bills8 maturing within one year offer slightly higher returns with minimal risk. Both can help protect against market volatility.

Allocating part of your portfolio to these assets can improve stability during downturns. Talk with your financial advisor to decide the right mix based on your goals and risk profile.


3. Explore High-Yield Fixed-Income Opportunities

With traditional bonds facing challenges, high-yield fixed-income strategies offer alternative avenues for income generation.

Investments in higher-yielding fixed-income investments can meet income and capital appreciation goals, especially when managed through disciplined investment processes. Consider the following options.

  • High-Yield Corporate Bonds: These bonds are issued by companies with higher default risk (often because of high debt levels or financial challenges). These bonds offer higher interest rates to compensate investors for taking on that additional risk.9

  • Preferred Securities: These hybrid investments combine features of stocks and bonds, paying set dividends and having priority over common shares (but not bonds) if a company faces financial trouble. They typically offer higher yields than common stock with more predictable income.10

  • Senior Secured Loans (Floating-Rate Loan Funds): These funds invest in business loans that adjust their interest rates as market rates change. The loans have first claim on a company's assets, putting them first in line for repayment if the company has financial trouble. This structure helps protect investors while offering income that can increase when rates rise.11

To reduce risk, you could buy bonds that mature (repay principal) at different times and invest in bond funds or ETFs that hold bonds from many companies or governments. Both strategies can help prevent big swings in your portfolio’s value. Always check with your financial advisor to make sure these choices match your goals and your risk profile.

Human head with dollar sign icon
Assets like gold and Treasury Inflation-Protected Securities (TIPS) have long served as hedges against inflation and market instability.

4. Implement Tax-Efficient Strategies

Tax planning is crucial for preserving wealth. These three approaches can help manage your tax bill and boost your after-tax returns:

  • Tax-Loss Harvesting: A strategy where you sell investments that have dropped in value and use those losses to reduce your taxes on investment gains. You then reinvest the money in similar (but not identical) investments to stay in the market. You must wait 30 days before buying back the same investment.

  • Municipal Bonds (“Munis”): These are bonds issued by states, cities, counties and other government entities to fund public projects like schools, highways, and water systems. Munis are known for their tax advantages, especially when you invest in bonds from your home state.12

  • Timing Income and Deductions: Plan when you receive income (like bonuses) and when you pay for tax-deductible expenses to help manage your tax burden over different years. This can be as essential a part of tax planning as retirement savings and investment decisions.

Always work with your tax advisor to customize these strategies to your tax bracket and long-term financial goals.


5. Reassess Withdrawal and Spending Plans

In volatile markets, especially those driven by government policies like tariffs13, it’s prudent to review your retirement fund withdrawal rate and spending habits. Adjusting these can prevent the erosion of your principal and ensure long-term portfolio sustainability. Adopting a flexible withdrawal strategy can also help maintain financial stability during downturns.

  • Make Market-Smart Withdrawals: Adjust your retirement withdrawals based on investment performance. Take less when markets drop and a bit more when they rise. This helps protect your savings during tough times while letting you benefit from good years.

  • Tier Your Expenses: Divide spending into “essential,” “discretionary” and “luxury” categories so you know where to cut back if markets go south.

  • Keep a Cash Cushion: Hold one to two years' worth of spending needs in cash or short-term instruments. That way, you won’t have to sell investments at inopportune times and deplete overall retirement savings.

These steps can help preserve your core capital, align spending with market realities, and sustain your lifestyle without taking on undue risk.


6. Rebuild Retirement Losses with Strategic Reallocation and Conservative Income Tools

Recent market swings have adversely affected many retirement accounts, keeping some elders up at night. But it might be possible to recover any losses. Consider these strategies that can help you rebuild your retirement funds and stay the course toward the retirement you planned.14

  • Rebalance to Your Target Mix: Buy more of the asset classes that have fallen below your plan and trim those that have grown too large. This can help you rebalance your portfolio and restore your intended allocations to stay on track.

  • Add Reliable Income Sources: Include investments like dividend-paying stocks, short-term U.S. Treasuries or CDs and conservative annuities. These reliable income sources can provide steady cash flow.

  • Use a Bucket Approach: Divide your savings into short-term (zero to three years), intermediate (three to seven years) and long-term (more than seven years) buckets, matching each to when you’ll need the money.15

  • Consider Opportunistic Roth Conversions: During market dips, converting part of your tax-deferred retirement savings to a Roth IRA can lock in a lower tax base and set you up for future tax-free growth.16

By combining these tactics, you can shore up income, manage withdrawal risk and better position your retirement savings for the next market upswing.


Partner with Your Financial Advisor

Implementing these advanced strategies requires careful coordination with your trusted advisors. They can help tailor allocations, manage risk and optimize tax and retirement planning for your unique goals.

By proactively diversifying, hedging, rebalancing, and reassessing spending, you’ll be better equipped to navigate economic uncertainties, preserve your principal and enhance your wealth.

Important disclosure information

Asset allocation and diversifications do not ensure against loss. This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Lorie Konish, “Young, wealthy investors turn to alternatives instead of traditional stock and bond investments” CNBC, July 5, 2024. Accessed June 3, 2025. Back
  2. Corporate Finance Institute, “Market Neutral,” accessed June 3, 2025. Back
  3. Corporate Finance Institute, “Managed Futures,” accessed June 3, 2025. Back
  4. Investor.gov, “Stock Purchases and Sales: Long and Short,” accessed June 3, 2025. Back
  5. Ben Dummett, “Gold on Pace to Hit New High,” The Wall Street Journal, April 11, 2025. Accessed June 3, 2025. Back
  6. Jeff Reeves, “Best Investments to Sidestep Trump's Trade War,” Kiplinger, April 7, 2025. Accessed June 3, 2025. Back
  7. Treasury Direct, “Treasury Inflation Protected Securities (TIPS),” accessed June 3, 2025. Back
  8. Investor.gov, “Treasury Securities,” accessed June 3, 2025. Back
  9. Investor.gov, “High-yield Corporate Bonds,” accessed June 3, 2025. Back
  10. Akhilesh Ganti, “Preferred Stock: What it Is, How it Works,” Investopedia, June 5, 2024. Accessed June 3, 2025. Back
  11. James Chen, “Senior Bank Loan: Definition, How It Works, Rates & Risks,” Investopedia, November 30, 2020. Accessed June 3, 2025. Back
  12. Investor.gov, “Municipal Bonds,” accessed June 3, 2025. Back
  13. Donna Fuscaldo, “Trump to Tariffs: How Retirees Can Manage Market Turmoil,” Kiplinger, April 10, 2025, accessed May 10, 2025. Back
  14. Judith L. Leahy, “Fall Financial Check-In: How Balanced Is Your Portfolio?,” Kiplinger, August 17, 2024. Accessed June 3, 2025. Back
  15. Justin Kuepper, “Bucket Strategy vs. Systematic Withdrawals: Knowing the Difference,” Investopedia, December 2, 2024. Accessed June 3, 2025. Back
  16. Julia Kagan, “Roth IRA Conversion: Definition, Methods, and Example,” Investopedia, November 10, 2024. Accessed June 3, 2025. Back

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