Balancing Long-Term Goals with Short-Term Market Swings
One of the biggest challenges for investors is balancing long-term goals with short-term market moves. Market rallies and downturns alike can create pressure to react to headlines, sparking a fear of missing out.
Decades of boom-and-bust cycles show there are no free lunches. This is why stocks, bonds, and other core asset classes remain the foundation of most portfolios—they offer the balance of risk and reward needed to reach financial goals. In contrast, hot assets such as cryptocurrencies or commodities can surge but often reverse just as quickly.
The key is not timing every swing, but building a portfolio that can weather different conditions while keeping long-term plans—retirement, family needs, or charitable goals—front and center.
Bitcoin: Volatile but Attention-Grabbing
Bitcoin has surged to new highs as Congress considers cryptocurrency regulation, including the GENIUS and CLARITY Acts. These headlines, alongside new ETF products and institutional adoption, have fueled investor interest.
Yet Bitcoin’s swings remain far more dramatic than the stock market. In 2022, it fell more than 75% compared to a 25% decline in the S&P 500. While it rebounded strongly, this volatility means Bitcoin can amplify portfolio risk during downturns.
Bitcoin is prone to extreme swings
Other cryptocurrencies, such as Ethereum, have not followed the same path—highlighting the need for caution. For long-term investors, the question isn’t whether crypto makes headlines, but whether it fits their risk tolerance and overall plan.
Copper: Growth Trends and Tariff Impacts
Copper has also hit record highs following U.S. tariffs on imports. As a metal essential to construction, electronics, and renewable energy, copper is often viewed as an economic indicator—earning the nickname “Dr. Copper.”
The copper rally reflects growth trends and tariffs
While tariffs may encourage domestic production, they also disrupt supply chains and pricing in the short run. China’s demand further ties copper prices to global economic shifts.
For investors, this means copper can add economic sensitivity to a portfolio, but predicting its next move is as difficult as forecasting trade policy.
Precious Metals: Traditional but Unpredictable
Gold and silver, long considered hedges against inflation and uncertainty, have also rallied. Central bank purchases, geopolitical risks, and currency fluctuations often drive demand.
History shows that gold can perform well during crises, but over long periods stocks have outpaced it. The 2010s, when many expected gold to rise but it stagnated, illustrate how hard it is to predict these assets.
While precious metals can diversify a portfolio, they should complement—not replace—core holdings in stocks and bonds.
The Bottom Line
So, once again, what should matter to a long-term investor is their overall portfolio and whether it aligns with long-term financial goals. Assets like Bitcoin, copper, gold, and silver underscore both their potential benefits and the importance of thoughtful allocation decisions. At the very least, these assets should complement, not replace, diversified holdings in stocks, bonds, and other core asset classes.
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The views expressed represent the opinions of Mendel Money Management as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.
Diversification and asset allocation do not ensure a profit or guarantee against loss. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov. Past performance is not a guarantee of future results.
