Why Geopolitical Risk and Market Volatility Matters
Market volatility has been high. Financial market swings are up to their highest level this year, and within the past few weeks, markets saw a correction of almost 10%, but then Wall Street recouped some of those losses. Reuters states that Volatility in the S&P 500 as measured by the VIX index – Wall Street’s trusted barometer of investor anxiety, the VIX index is currently trading around 20, the highest since the Fed cut interest rates in December 2024, having peaked as high as 69 during the height of the coronavirus market crisis in mid-March 2020.
Geopolitical risk evidenced by the recent resumption of conflict in Gaza, as well as negotiations between the US, Russia, and Ukraine, and seeing a Germany that is rearming have all added concerns that this could destabilize global financial markets. Then, add on volatility due to massive government layoffs, trade tariffs, higher inflationary prices, and fears of a possible recession, and the culmination of all these factors could have a material impact on corporate earnings. What has been particularly unsettling to many in the US and abroad is that US policies matter, and if global investors feel that the rule of law in the US is being undermined, this could have repercussions on the international flows of assets into the US. According to the 2024 USA Wealth Report America, the US accounts for 32% of global liquid investable wealth — a significant USD 67 trillion, published by global wealth advisory firm Henley & Partners. Despite global GDP fluctuations in the post-COVID era, the U.S. economy has remained relatively stable compared to other G7 nations.
What are Investment Professionals Telling their Clients?
Notwithstanding the heightened geopolitical risk and market volatility, it’s essential to put things in context and hear what advisors and investment professionals tell clients to help them stay grounded.
According to Michael Cemblast, Chair of the Market and Investment Strategy Group at J.P. Morgan, “Corrections are not uncommon, over the last 100 years: 10% corrections happened 60% of the time and a 15% correction happened 40% of the time.” He also notes that “in years with 10-20% corrections, full-year returns averaged 15%.” While this context is critically important in understanding the big picture, it still doesn’t remove the pain when clients see significant declines in their portfolio. So what are investment professionals and or advisors saying? Speaking to Advisors and Investment professionals located in Texas, Minnesota, New York, and Connecticut, here is what they had to say.
CLI Investment and Management Company
“Cash is King,” says Irene Shen, CLI’s CEO & Founder. “In today’s volatile market, the major value we navigate for our clients is building a niche that generates strong passive income. We achieve this through private credit and stable single-family rental (SFR) income, complemented by property appreciation.” She is very cognizant that every client’s investment goals are different. Still, market uncertainty must always be factored, so if you develop that foundation as part of a client’s portfolio from the beginning, you can weather these storms not if, but when they come. CLI is an investment firm that focuses on helping overseas Chinese and Asian clients and their families invest in the US.
Irene is a seasoned professional with a successful 20+ year finance and investment career specializing in residential and commercial real estate. Since March 2022, she has served as CEO of CLI Investment & Management Co., a family-owned business, where she is leveraging her investment expertise and Chinese language skills to manage and grow family businesses, VC, retirement, wealth preservation, and the EB-5 visa program. Irene shared that the landscape of U.S. investment has undergone a seismic shift in recent years, particularly for Chinese investors. Geo-political tensions, evolving regulations, and shifting policies—especially surrounding trade tariffs, immigration, and real estate—have created an environment where traditional approaches no longer apply. While this has complicated the investment process, it hasn’t halted the flow of Chinese capital into the U.S. Instead, investors have adapted, shifting to more strategic, low-profile investment approaches that align with current market dynamics. Irene has completed over 20+ investment projects and has a total deal value of $1.3 billion.
Her firm has been instrumental in guiding high-net-worth Chinese families to navigate a complex and ever-changing investment environment. Despite the challenges, Shen sees significant opportunities for investors who understand how to adjust to the new normal.
Luther, McFarland, Kuehner, Sell & Associates (Ameriprise) RIA
Based in New Prague, Minnesota, Patrick Sell, a Private Wealth advisor with Ameriprise Financial, has over 24 years of industry experience. In early March, at the height of market volatility, their team made the decision to call each of their clients to answer questions, assure investors that they had the appropriate investment strategy based on their goals and risk tolerance, and do a risk assessment check-in. It took several days, but Patrick believes that “this speaks to the unwavering commitment we have for our clients given that there is a lot of – uncertainty amongst investors. He notes that being present and providing resources to clients so they can make informed decisions as opposed to making decisions purely based on emotions is essential. “We believe that while navigating changing markets can be challenging, sound financial planning and advice can help our clients better position their portfolios to take advantage of opportunities and mitigate loss to accomplish their goals.”
Luther, McFarland, Kuehner, Sell, and Associates focus on Financial Planning, Intergenerational Wealth Transfer, Retirement Income Strategies, and Investment Management. Patrick’s team also provides market research and other resources to clients. Currently, they are managing around $600 million in AUM and have a staff of 10 people.
Zenith Wealth Partners
“When discussing market ups and downs with clients, I emphasize focusing on what we can control. By sticking to a well-planned asset allocation that matches your life goals and comfort with risk, our clients can feel more confident navigating market changes” says Chelsea Ransom-Cooper, Co Founder of Zenith Wealth Partners. Contributing to dollar cost averaging as opposed to trying to time the market helps mitigate risk. However, before you make these decisions, you need to understand your risk tolerance. For new investors in their early 20s or 30s who have never experienced a market correction or for someone planning on retiring soon, experiencing a market correction can be very unsettling. When advising clients, Chelsea notes that being patient, actively listening, and being responsive is critical during periods of market volatility. At the same time, understanding both the risks and opportunities of market volatility is equally important. If you have cash that is able to be deployed when markets are significantly down, then understanding that this is a good buying opportunity needs to be acted upon, as delaying this decision can cause you to miss out.
Chelsea serves as the Co-Founder and Chief Financial Planning Officer at Zenith Wealth Partners. In October 2020, she partnered with Jason Ray at Zenith Wealth Partners, a Philadelphia-based firm that focuses on clients in their early 30s to mid-50s on their wealth accumulation journey, the majority of whom are women or people of color. “They’re also first-generation wealth builders, so they need that education, but they also want to work with people who look like them and empathize with them.” The team has grown to eight and has over $100 million in AUM.
Key Takeaways from Market Volatility
In a season of significant geopolitical risk and market volatility, the role of financial advisors and investment professionals has become more important, but this is also a great opportunity to educate, demystify, and engender a more financially literate populace both in the United States and globally. Through expert guidance, thought leadership, fintech, and tech-enabled financial literacy tools that include robo advisors, more resources are enabling people to navigate financial market upheavals and achieve their long-term financial objectives. Christina Wu, Deputy Chief Investment Officer at The Dallas Police & Fire Pension System Christina, notes, “The Chinese characters for crisis wēi (危) and jī (机;) engenders both crisis and opportunity; In other words, how do we see a silver lining in every crisis.” In terms of best business practices, how do we use this current market environment to change behaviors on the need to save more, plan for retirement, or potential periods of unemployment transitions? Planning for the unexpected means being intentional about diversifying portfolios, mitigating risk, and being more knowledgeable about the risks and opportunities in investing in asset classes like stocks, bonds, cryptocurrency, alternative investments, etc.
Craig Broderick, former Chief Risk Officer at Goldman Sachs and currently on the Board of Bank of Montreal and Circle, says “To effectively manage investment risk during volatile and unpredictable periods requires discipline, diversification, and learning from past mistakes. Utilizing professional expertise can also help to structure a resilient portfolio.”
Special thanks to Lorena James for her exceptional research, quantitative, and editorial contributions to this article.