Volatility continues as stocks struggle in September

Published: Sep. 22, 2020 at 7:19 AM EDT
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LEXINGTON, Ky. (WKYT) - The stock market fell by over 500 points Monday after being down as much as 900 in intra-day trading. September has been on a very rocky course as investors are concerned a March repeat could be ahead. Independent fiduciary financial advisor Josh Smith of Strategic Wealth Designers joined WKYT to explain how a financial advisor views volatility and how assets should be positioned to deal with the continued rollercoaster. He says there are some indicators that the market could be headed for a continued pull back the rest of the year.

“We are seeing a lot of asset classes pull back and that can be a sign of a major move backward coming,” Smith says. “Oftentimes investors will abandon one sector or another but when you see all sectors pulling back that can be concerning. Getting your assets positioned in a manner that places safety in your investment portfolio is key.”

Smith often talks about the importance of the Rule of 100 when it comes to investment strategy. He says if you build your retirement portfolio with the Rule of 100 in mind, the volatility of the stock market will be less concerning.

“The Rule of 100 is a simple but vital rule when you are deciding how to approach retirement,” Smith says. “Just take 100 minus your age and that is the amount of your investment portfolio that you can take a risk with. The rest of your portfolio should be safe and protected. If you get this simple structure in place, the huge swings in the stock market won’t cause such great stress every time you look at your investments.”

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