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Business & Innovation Expo of Western Mass.

Strategic Asset Allocation Is Key to Protecting a Portfolio

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Business & Innovation Expo of Western Mass.

Navigating Market Volatility

By David Modzelewski

 

In April 2025, a significant policy shift left investors unsettled as the S&P 500 tumbled about 12% in a single week. With the new administration in office, we have seen heightened volatility, and more may follow. In times like these, many investors ask themselves, how do I protect my portfolio?

The answer lies in strategic asset allocation. By working with a trusted financial advisor who acts in your best interest, you can build a portfolio designed to guide you through uncertain times like these.

Asset allocation is a fundamental component in building an investment portfolio. By constructing a diversified portfolio that encompasses various asset classes such as stocks, bonds, and cash, you can inherently reduce risk and volatility, while still acquiring desirable returns.

During periods of volatility, human nature often responds impulsively to market flux; however, maintaining discipline is key. For most investors, modifying your allocation during a declining market can have a negative impact on your assets. If a market downturn prompts you to alter your allocation, it may indicate that your portfolio was not properly allocated to begin with.

David Modzelewski

David Modzelewski

“Asset allocation is a fundamental component in building an investment portfolio. By constructing a diversified portfolio that encompasses various asset classes such as stocks, bonds, and cash, you can inherently reduce risk and volatility, while still acquiring desirable returns.”

Successful investing begins with building a portfolio tailored to your risk tolerance and short-term needs. This allows for investors to weather downturns in the market while enabling them to take advantage of the subsequent market growth.

Many variables go into deciding the proper asset allocation for your portfolio. To determine these variables, a financial advisor will ask in-depth personal questions to gain a better understanding of your financial situation and goals.

Asset allocation must be tailored to meet your needs — there is no one-size-fits-all answer. The better your advisor understands you, the more effectively they can personalize your asset allocation. Below are three factors used to influence the decision behind allocating assets.

 

What Are Your Goals?

Your goals anchor your asset allocation strategy. Advisors use tools like the Monte Carlo simulations to project outcomes and determine the growth rate required to achieve such goals. This analysis balances the risk required with your comfort level to get you there.

Example: An investor wants to buy a second home, pay for their kids’ college, or retire early. They may need a specific dollar goal to reach within 10 years. Based on projections of returns expected for an asset allocation over that time period, you can see the probability of success.

 

When Will the Funds Be Needed?

Your age and life stage have a significant impact on the time horizon of your investments. How long your investments will remain untouched shapes your allocation. Typically, a longer time horizon allows for an investor to take on greater risk, as there is time to recover from declines. Shorter horizons call for a more conservative approach to protect capital.

Example: Consider an investor nearing retirement who will soon take withdrawals from their investments for living expenses. This is a massive life transition for the investor. Investors may now think they are retiring and that they should shift all of their funds into a fully conservative investment, but that is not always the case. Remember, if you retire at 65 and live into your 90s, your assets still need to grow to combat inflation and longevity.

 

Can You Handle a Volatile Market?

Your risk tolerance determines the asset allocation’s composition. Fear of loss can drive investors to sell during a downturn, which is often the wrong decision. A trusted advisor can help you remove emotions from investing to ensure that you do not lose sight of your long-term plan. Many investors consider moving to cash during volatility, but this can lock in losses and miss rebounds, as seen in April when markets recovered swiftly after a sharp decline.

Example: The month of April 2025 is a great illustration of this. Following President Trump’s declaration of ‘Liberation Day,’ the S&P 500 saw a 12.14% decline from April 2 to April 8. The uncertainty surrounding tariffs left investor sentiment low. By the end of April, the market had largely recovered, finishing just 1.80% below its April 2 level. The momentum and recovery of the market carried into the month of May, which finished up 5.49%, the best May performance for the S&P 500 since 1990. Investors who exited the market on the 12.14% drop likely missed the ensuing recovery and growth.

 

Key Points

• Individual investors need to have a comprehensive approach to allocate their assets specifically for their goals.

• Working with a fiduciary advisor ensures your portfolio is built to direct you through all market cycles, rather than being driven by them.

• Over time, asset allocation can drift as certain asset classes grow faster than others. It is important to rebalance your portfolio on a periodic basis.

• Don’t wait for the next market downturn — schedule a portfolio review with a trusted advisor today to ensure your investments are positioned for success.

 

David Modzelewski is a financial advisor with St. Germain Investment Management.

Scenes from the 2017 Business Innovation Expo of Western Mass.

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Business & Innovation Expo of Western Mass. Cover Story Events

Looking Back at an Exciting, Informative Day

expologo2017comcastThe Business & Innovation Expo of Western Mass., the annual show produced by BusinessWest and the Healthcare News and presented by Comcast Business, drew nearly 150 exhibitors and 2,000 visitors to the MassMutual Center on Nov. 2. They enjoyed a series of educational seminars, breakfast and lunch programs, a day-capping Expo Social, and much more. Take a look through the photo gallery below for a recap of all the excitement, insight, and innovation.

Photography by Dani Fine Photography

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Nov. 2 Business Show Will Put the Spotlight on Innovation

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Business & Innovation Expo of Western Mass. Events

Countdown to the Expo

expologo2017webIt’s a subtle name change, but a rather large adjustment in tone for what has become a fall tradition within the region’s business community.

Indeed, the annual show at the MassMutual Center in downtown Springfield is now known as the Business & Innovation Expo of Western Mass., and this change — the addition of that word ‘innovation’ on the marquee — speaks volumes about the business-to-business show’s new and expanded mission, said Kate Campiti, associate publisher of BusinessWest, which has managed the show since 2011.

“For more than 200 years now, this region has had an incredibly strong tradition of innovation in business,” said Campiti. “And that tradition has taken many forms, from new products to new processes to new ways of thinking about to how to meet the needs of a constantly changing society. That tradition continues today, and the Expo will make this abundantly clear.”

Elaborating, she said the Nov. 2 show, still very much in the planning stages, will be, in effect, a showcase of innovation and the many forms it takes in a changing, highly competitive business climate.

“Innovation isn’t just a theme for this event,” said Campiti. “It will be a compelling thread that runs through the programming, the educational seminars, the special presentations, and more. This will be a celebration of innovation in some ways, but, more importantly, it will be a powerful statement about how that tradition of innovation continues today.”

Once again presented by Comcast Business, the Expo has become a fall tradition in Western Mass., attracting more than 2,000 visitors and more than 150 exhibitors to the MassMutual Center.

As always, there will be a strong business-to-business component to the show, said Campiti, adding that the event provides opportunities for businesses to showcase their products and services, and for these businesses and attendees to make important connections.

But there will be an educational component as well, she said, and much of the focus will be on innovation and the many forms it takes.

“People tend to think of innovation as new-product development, and that’s a big part of it,” she noted. “But there is information in all aspects of business — from process improvement to how companies attract and retain talent; from the use of technology to make a business more productive and efficient to development of systems to not only generate ideas but cultivate them into advances; from how an emergency room handles peak traffic flows to how a bank safeguards its customers from fraud.

“Innovation is vital to the success of every sector of our economy, from education to healthcare to manufacturing,” she went on. “And the Expo will show innovation isn’t simply a watchword, but a philosophy, or attitude.”

In addition to Comcast Business as presenting sponsor, Inspired Marketing is the show partner, MGM Springfield is participating as corporate sponsor, the Isenberg School of Management at UMass Amherst is the education sponsor, and the Better Business Bureau is a contributing sponsor. Additional sponsorship opportunities are available.

Details of the show will be presented in upcoming issues of BusinessWest and online HERE.

For more information on the show, to register, or to request information on becoming a sponsor, visit the website or call (413) 781-8600.