At Lucia Capital Group, we understand that times of market volatility can create unease. With everything happening globally—from shifts in monetary policy and political uncertainty to the broader economic landscape—it’s natural to feel a bit uncertain. But if you’re following a personalized strategy like The Bucket Strategy®, this is exactly what it was built for.
Renowned investor Ray Dalio refers to the current environment as part of a “Big Cycle”—a rare and significant turning point where long-standing systems are being reshaped. And with that kind of change comes, yes, market turbulence. But here’s the good news: You don’t need to react impulsively, because you’ve already planned ahead.
Let’s take a moment to look at where the markets stand. As of April 7, the S&P 500 has dropped nearly 14%. Growth stocks are down even more—close to 19%. In contrast, value stocks have held up better, down about 7.5%, and international stocks are actually slightly up year-to-date. That’s the power of diversification at work.
If you’re retired—or nearing retirement—your strategy likely includes a significant allocation to fixed income in Buckets 1 and 2. And this year, that’s paying off. U.S. Aggregate Bonds are up nearly 4%, corporate bonds about 2.5%, and municipal bonds over 1.5%. This is why we don’t make investment decisions based on headlines. Instead, we focus on your time horizon and risk tolerance.
We encourage you to watch the video for a closer look at the charts we referenced, especially the long-term performance of various asset classes. The key takeaway? Stocks have historically outperformed bonds and inflation—but not without volatility. Market pullbacks of 5–10% happen multiple times a year. Corrections of 10–20%? Also normal. Volatility isn’t a flaw in the system—it’s part of how the market works.
Emotions often cloud our judgment. When markets rise, people tend to buy. When they fall, fear takes over and people want to sell. Unfortunately, this leads many investors to make poor decisions. In fact, emotional decision-making is a big reason the average investor earns just 3.6% annually. That’s not due to lack of access or knowledge—it’s a discipline issue. And that’s exactly why The Bucket Strategy was created.
Trying to time the market is incredibly risky. Miss just the 10 best days over a 20-year period and your return could be cut nearly in half. Most of those best days? They happen right after the worst ones. So instead of guessing, stay invested.
Historically, there’s a 74% chance the market is up over any 1-year period. Over 15 years, that number rises to 100%—but only if you stay in the game. Your buckets help make that possible.
Let’s quickly revisit how your structure works:
- Bucket 1: Income Now (Years 1–7)
Conservative investments like cash and bonds provide stability and meet short-term income needs. - Bucket 2: Income Later (Years 8–15)
This includes balanced investments and dividend-producing assets to replenish Bucket 1 over time. - Bucket 3: Growth (Year 15 and Beyond)
This long-term growth bucket is invested in domestic and global stocks. Since you won’t need these funds for years, it has time to grow through the market’s natural ups and downs.
And depending on your plan, you may also have:
- A lifetime income bucket from an annuity, offering protected income, and/or
- Alternative investments to provide additional diversification
While not every client uses these, they can further strengthen your plan when implemented appropriately.
Here’s what we want you to take away: If you have a personalized Bucket Strategy in place, let it do its job. There’s no need to guess or worry about short-term market movements. Your portfolio was designed to deliver income now and growth later.
If you’re not already working with our team—or if someone forwarded this message to you—this is a great time to consider your own strategy. Selling investments in a downturn to generate income can lead to something called reverse dollar cost averaging, which can permanently harm your retirement plan.
Yes, the world is uncertain right now. Yes, volatility is part of the picture. But if you have a strategy, a structure, and a team behind you, you are not unprepared. We’re here, making adjustments as needed, and helping guide you forward with confidence.
If you have questions, reach out to your advisor. We’re in this together.
