How the Wealthiest Americans Are Protecting Their Money From Market Instability
Written by
Laura Bogart
Edited by
Kristen Mae
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If you’ve even casually glanced at the headlines lately, you’ve been steeling yourself for some serious market instability. Even the wealthiest Americans aren’t immune from feeling like they’re stuck on a roller coaster they really, really want to get off of — preferably before another stomach-churning loop.
At least the wealthiest people in the country often have access to truly excellent counsel in the form of financial advisors who can tell them how to protect their wealth in a volatile market. But much of this insight isn’t just applicable to the wealthy — everyday investors can also apply these strategies to their own money management.
They Understand Why Their Investments Work for Them
It’s easy to get caught up in a fad, whether it’s a viral TikTok recipe or an investing trend. But savvy, wealthy investors know that buying or selling a stock just because it’s the new hot tip — or it’s been suddenly cast out in the cold — is the wrong way to protect their wealth.
They understand why each stock in their portfolio belongs there and hold onto it if it aligns with their goals. Of course, they’ll sell if an investment no longer fits their strategy — but not just because it’s no longer trendy.
Richard McWhorter, private wealth advisor and managing partner at SRM Private Wealth, recalls a conversation with a wealthy client early in his career. The person said, “Kid don’t tell me you’re going to make me rich. I am rich. Just don’t mess it up.”
That interaction shaped one of McWhorter’s core investing beliefs: Wealthy people should understand both the upside and downside of each investment.
“Most investors buy into a story, an investment, and/or a financial advisor’s historical stated returns but they don’t take enough time to understand if this investment is right for them or what the downside risks are to the investment,” he said.
They Don’t Panic During Market Fluctuations
For Jen Reid, financial planner and founder of Base, wealthy investors need to remember that they’re actually better positioned to handle market ups and downs than many others. She emphasizes that good investing habits are more about maintaining the right mindset than protecting wealth like a dragon hoarding gold.
“If you are a wealthy client, you have more opportunity to bear with market instability and take advantage of dips than most of the country when it comes to investing,” she said. “Unfortunately, as wealthy individuals get more and more wealth, there are a lot of people that want to hoard it and never see it dip, but the ebbs and flows of the market are always going to exist.”
She helps her clients focus on the power of time and compound interest — as well as what they actually need in the next six to 18 months.
“Reminding them to stay invested where they need to be invested and in cash where they need to be in cash or conservative is really important,” she said.
They Prioritize Diversification and Liquidity
Diversification is a cornerstone of smart investing, whether you’re managing hundreds or hundreds of millions of dollars. Rob Edwards, managing director and senior PIM portfolio manager at Edwards Asset Management, encourages his wealthy clients to focus on three key principles: diversification, liquidity, and purpose.
He notes that there can be differences between what new and old money investors need to do. For new money investors, building a strong foundation across asset classes is essential. Meanwhile, wealthy families should revisit legacy holdings to make sure they still align with their current financial and life goals.
“For both, a thoughtful, goal based plan provides more clarity,” he said. “Unfortunately, volatility is inevitable, but when your portfolio reflects your priorities, it’s easier to stay grounded and not make emotional decisions.
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