Financial Planning Fridays #152: How to Prepare for a Market Downturn
In April 2025, U.S. stocks fell nearly 20% and then rebounded to a new all-time high within about three months, one of the fastest recoveries on record. This video breaks down the three choices investors face during a downturn, selling, holding, or buying more, and explains why Presilium prepares client portfolios for declines well in advance.
In April 2025, U.S. stocks fell nearly 20% and then rebounded to a new all-time high within about three months, one of the fastest recoveries on record. This video breaks down the three choices investors face during a downturn, selling, holding, or buying more, and explains why Presilium prepares client portfolios for declines well in advance.
Key takeaways
- In July 2025, the market hit a new all-time high less than three months after a nearly 20% decline in April, one of the fastest rebounds on record following a 15%-plus drop.
- Selling after a decline can feel like relief, but it creates the difficult question of when to get back in, and many investors never do so in time to capture a rebound.
- Holding steady can work well when a portfolio is well built from the start, and it beats abandoning long-term investments every time the market dips.
- Buying more stock during a downturn, Presilium's preferred approach, means acting when others are fearful, and is how long-term wealth is often built.
Hi friends. In early July, the market hit a new all-time high less than 3 months after a nearly 20% drop in April. According to the Wall Street Journal and Dow Jones Market Data, this was the fastest rebound to a new high after a 15% plus market decline. It really was extraordinary.
We're proud to share that we rebalanced our client portfolios and bought stocks for them on April 9th, near the lowest point of the year and just before this record-setting recovery. We were able to act confidently because we were prepared. We had a plan in place long before the market fell.
So today, let's talk about the three choices that investors face during a market downturn, choices that can dramatically impact long-term performance. Option one, sell after the market declines. It can feel like a relief in the moment. You stop the bleeding. And after the tariff headlines in April, plenty of people did just that. But now you're faced with the toughest question in investing: when do I get back in? And most people don't, at least not in time to capture the full rebound.
Option two, hold. Stay the course. This approach can work well if your portfolio is well built from the start. It's certainly better than selling your long-term investments every time the market dips or a headline turns negative.
And finally, option three, buy more stock after the market goes down. This is our preferred approach and why we rebalance client portfolios. It's not easy. It means buying when others are fearful, when the news is bad, and when your emotions are screaming 'wait.' But that's exactly when the best opportunities tend to appear. That's where long-term wealth is often built, by buying quality investments at a deep discount during a crisis.
At Presilium, we don't wait for a crisis to prepare. We are prepared well in advance. We've created a custom report for each of our clients that shows how their portfolio would have performed during the last six major market downturns. It helps us plan, not guess, for what comes next. So, when the next pullback happens, the question is, which choice will you be ready to make? Thank you, and I look forward to talking with you next Friday morning.
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