Riding Out Market Volatility with a Financial Plan
As discussed on Today’s Business Radio, airing on Twin Cities stations KFAN and KTLK, host Tom Lyons sat down with Joe Grochowski, an senior wealth advisor from Vector Wealth Management, to talk about how retirees and long-term investors can navigate stock market volatility.
Stock market swings make headlines—and make many investors anxious. Volatility is a normal part of investing, driven by factors like interest rates, inflation, and global events. In the short term, markets can be unpredictable; over longer periods, disciplined investors have historically been rewarded for staying the course.
Why Volatility Isn’t the Enemy
Market ups and downs are not a sign that “something is broken.” They’re the cost of earning long-term growth. The key is having a plan that separates today’s spending needs from tomorrow’s growth, so you aren’t forced to sell at an inopportune time.
Our Bucket-Based Planning Framework
At Vector, we use a simple, time-segmented approach that helps retirees and near-retirees stay invested with confidence.
Think of your portfolio as four buckets, each aligned to when you’ll use the money:
Near-Term Spending (Now–2 Years)
Very conservative holdings designed to cover day-to-day living expenses. This near-term bucket reduces the need to sell to cover expected spending during market dips.
Stability/Preservation (~ 2–5 Years)
An intermediate segment of moderate and conservative assets meant to hold up against extended volatility.
Growth (~ 5–10 Years)
Diversified growth assets staged with time to recover from interim declines and outpace inflation.
Long-Term/Legacy (10+ Years)
Higher growth potential aimed at sustaining retirement over decades and supporting legacy or charitable goals.
This structure helps ensure immediate needs are planned for while giving longer-term investments the time they need to grow.
“Does This Work If I Have $2–3 Million?”
Yes. Many retirees with $2–3 million (and those above or below that range) value the clarity of knowing which investments do what and when. The framework scales to different asset levels and can be tailored to taxes, income sources, risk tolerance, and estate objectives.
Getting Started
Build a personalized plan. Work with a bucket-based planning firm like Vector Wealth Management to map cash flows and align segments to your timeline.
Right-size each bucket. Determine spending needs, refilling rules, and how to handle market drawdowns.
Stay disciplined. Rebalance periodically and review annually or after major life changes.
With a clear framework, market volatility becomes a factor to manage—not a reason to abandon your goals and financial plan.
Ready to learn more? Schedule a consultation today.
This content is provided for general information and should not be treated as a substitute for professional advice. Investments involve risk, including the potential loss of principal.
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