Jose Luis Pelaez Inc | Digitalvision | Getty Images
Data suggests the U.S. economy may be in a precarious spot — and investors may be wise not to take outsized risks with their portfolios for fear of steep losses, experts said.
“This is not the environment to be a hero in,” Callie Cox, chief market strategist at Ritholtz Wealth Management, wrote this month in a newsletter.
In other words: Stick to your long-term investment plan, including an appropriate asset allocation and time frame to reach your goals, experts said. Avoid the temptation to funnel a big chunk of money into high-flying shiny objects like individual technology stocks or cryptocurrency, they said.
“You need to own a basket of quality assets and investments, hold your breath and let markets do their work,” Cox said in an interview with CNBC.
To be sure, this is sound perennial advice typically offered by financial planners.
But some market-watchers caution that economic headwinds could serve up ample volatility in the coming months.
“I think there are a lot of reasons to be optimistic, but also cautious at the same time,” said Winnie Sun, co-founder of Sun Group Wealth Partners, based in Irvine, California, and a member of CNBC’s Financial Advisor Council.
Employers in the public and private sectors added 35,000 jobs, on average, over the past three months, according to federal data.
Job growth from May to July is happening at a “pace you normally see around or in recessions,” Cox wrote.
It’s also down from average monthly growth of 123,000 jobs during the same three-month period of 2024, and from 111,000 in the first three months of 2025.
More from ETF Strategist:
Here’s a look at other stories offering insight on ETFs for investors.
The size of the U.S. labor force has declined for three consecutive months, which hasn’t happened since 2011, Cox wrote.
“The job market is in a precarious spot after months of slowing consumer spending,” Cox wrote. “The American consumer drives the economy, and the economy ultimately drives the direction of markets,” she added.
Economists also worry about inflation reigniting as tariffs levied by the Trump administration work their way into higher prices for consumer goods and services.
There have been some signs of that in recent months, and many economists expect that inflationary pressure to bite harder in coming months.
‘People are feeling like they’ll be left behind’
Despite these headwinds, experts say the economy isn’t in dire shape. The stock market has also continued to march to new highs, with the S&P 500 stock index up about 10% since the start of the year.
Many of Sun’s clients have shown urgent interest in artificial intelligence and crypto amid lofty returns, versus more bread-and-butter long-term planning, she said.
Shares in tech giants like Meta, Microsoft and Nvidia are up about 34%, 24% and 36%, respectively, this year, for example. Bitcoin prices are also up over 25%.
It’s a “hurry-up-and-invest” mindset, Sun said.
“A lot of people are feeling like they’ll be left behind,” she said. “But we don’t feel like we have the full picture yet on where the U.S. is economically.”
Tariff policy has whipsawed in recent months, leaving markets and investors grasping for answers as new import duties are announced, delayed or rescinded in a rapid-fire fashion, according to market-watchers.
“Right now, we feel it’s best to stick with diversified and long-term plans,” Sun said.
“A lot of the decisions being made right now are not financially driven,” she said. “I think it’s much more emotions-driven.”
Diversification and rebalancing are ‘key’
Sun advises investors to be well-diversified, and avoid the temptation to over-allocate their portfolio to growth-oriented sectors like technology. Having a well-diversified portfolio diversifies risks in the event lackluster economic data send markets tumbling, she said.
Exchange-traded funds or mutual funds, which are baskets of several different securities like stocks and bonds overseen by professional asset managers, can help the average investor stay diversified, she said.
Rebalancing more frequently in this environment is “key,” Cox said.
That entails ensuring your asset allocation hasn’t been thrown out of whack if certain segments of your portfolio outperform or underperform for a period of time.
“You never want to hit a market selloff and be more exposed to it than you think,” Cox said.
Jacob Manoukian, U.S. head of investment strategy, at J.P. Morgan Private Bank, cautions that taking too much risk off the table could also have adverse outcomes for investors.
Companies continue to have strong corporate earnings despite some relatively weak economic data — a dynamic that can persist for a while, he said.
“It’s hard to give advice to reduce risk substantially when corporate earnings are as strong as they are,” Manoukian said.
“When companies are surprising to the upside to that degree, we’d encourage investors and our clients to have the right amount of risk for their plan and not reduce risk unduly — that’s a way to underperform,” Manoukian said.
The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.
The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.
Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.
The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.
Here is the list of the 50 countries on the list as o August 3, 2026
Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.
Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.
Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.
The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.
Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.
By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.
Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.
As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.
Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.
Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.
Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.
Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.
Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.
Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.
Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.
Finance1 week ago
Economics1 week ago
Finance1 week ago
Accounting1 week ago
Accounting1 week ago
Economics6 days ago
Personal Finance6 days ago