5 Questions to Ask Your Advisor During a Market Downturn 

Market downturns can stir up a mix of emotions—from uncertainty about what’s next to concern about how your long-term financial plan may be affected. It’s normal to feel unsettled when the headlines are unpredictable and investment values shift. 

During these times, it can be helpful to slow down and focus on what you can control. Rather than reacting to short-term movements, asking thoughtful questions can offer clarity and help you stay grounded in your overall strategy. 

This post outlines five questions you may want to bring to your financial professional during a market downturn. Whether you’re seeking reassurance or simply want to understand how different pieces of your plan fit together, these conversations can support more intentional decision-making when conditions are less stable. 

1. “How does this market affect my current financial plan?” 

When markets decline, it’s natural to wonder whether your financial plan is still on track. This question can start a conversation about how recent market shifts may or may not influence the overall direction of your strategy. 

Your advisor can help you look at how your current allocation, income sources, or time horizon interact with current conditions. For some, it may be a chance to review how much risk they’re comfortable with. For others, it could be a time to check in on cash flow or retirement timing. 

Asking this question isn’t about looking for immediate answers or drastic changes. It’s about understanding whether any part of your plan may benefit from a closer look. Market downturns don’t always require action, but they can serve as a helpful reminder to pause and assess. 

2. “Is my portfolio still aligned with my comfort level for risk?” 

Market downturns often highlight how we really feel about risk. What once felt like an acceptable level of market exposure may feel very different when values start to fall. That’s why it can be useful to ask whether your current portfolio still reflects your risk preferences, especially in light of recent volatility. 

This question isn’t about making sudden shifts. It’s about checking whether the investments you hold still align with how you feel today, not just how you felt when your plan was first created. 

A financial professional can help review how your asset allocation may have shifted over time. Market movements can cause portfolios to drift from their original targets, which might change your exposure to certain types of risk. A conversation about risk comfort is a chance to bring awareness to how your investments support your goals and timeline. 

3. “Are there any tax strategies I should be thinking about during a market correction?” 

Market downturns can raise questions about potential tax planning moves. While not every strategy is appropriate for every situation, asking your advisor about options can help you better understand what may apply to your circumstances. 

Two topics that often come up during market declines are Roth conversions and tax-loss harvesting. A Roth conversion involves moving funds from a traditional IRA to a Roth IRA, which could be worth exploring when account values are temporarily lower. Tax-loss harvesting involves selling certain investments at a loss to offset capital gains, which may help reduce taxable income in specific situations. 

Asking about these strategies doesn’t mean they need to be implemented, it simply opens a conversation about whether market conditions present any planning opportunities worth evaluating within the context of your overall financial picture. 

4. “Do I have enough liquidity for unexpected expenses?” 

When the market takes a downturn, having readily accessible cash can make a meaningful difference. Asking about your liquidity helps you prepare to cover unexpected needs without relying on selling investments during unfavorable conditions. 

This might include reviewing your emergency fund, short-term savings, or other liquid assets that could support you in the event of a job change, medical expense, or other unplanned event. The amount needed varies from person to person, depending on lifestyle, income sources, and financial obligations. 

Understanding how much of your plan is accessible in the short term can provide a clearer picture of how you’re positioned to manage through periods of uncertainty. 

5. “Should I consider updating my estate or gifting strategy?” 

Market downturns can be a natural time to revisit long-term planning, including how you approach legacy goals or charitable giving. Asset values may be temporarily lower, which can affect how certain strategies are implemented. 

Asking your advisor whether current conditions might impact your estate or gifting plans can help you understand if adjustments are worth considering. For example, some individuals revisit gifting during downturns to explore whether now is an appropriate time to transfer assets to family members or charitable entities. Others use it as a checkpoint to confirm their estate documents still reflect their current wishes and circumstances. 

A conversation about estate or gifting strategies during a downturn can be a thoughtful way to revisit whether your plans still align with your goals and current circumstances. 

Final Thoughts 

Navigating a market downturn can feel uncertain, but it also offers an opportunity to pause and reflect. Asking thoughtful questions is one way to gain perspective, identify areas that may need attention, and stay focused on what matters most in your financial life. 

Whether you’re reviewing your portfolio, thinking about cash flow, or exploring tax and estate strategies, these conversations can help support more intentional planning. 

If you’re looking for a simple place to start, our Market Correction Checklist outlines key areas you may want to review. It can serve as a helpful guide as you prepare to meet with your advisor or think through your own strategy. 

Have questions? Our team is here to help if you’d like to start the conversation. 

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This blog expresses the author’s views as of the date indicated, are subject to change without notice, and may not be updated.  The information contained within is believed to be from reliable sources.  However, its accurateness, completeness, and the opinions based thereon by the author are not guaranteed – no responsibility is assumed for omissions or errors.  This blog aims to expose you to ideas and financial vehicles that may help you work towards your financial goals. No promises or guarantees are made that you will accomplish such goals.  

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Investment advisory services are offered through Liberty Wealth Management, LLC (“LWM”), DBA Liberty Group, an SEC-registered investment adviser.  For additional information on LWM or its investment professionals, please visit www.adviserinfo.sec.gov  or contact us directly at 411 30^th Street, 2^nd Floor, Oakland, CA  94609, T: 510-658-1880, F: 510-658-1886,  www.libertygroupllc.com. Registration with the U.S. Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. 

References 

Vanguard. (n.d.). Maximize Your Tax Savings with Tax-Loss Harvesting. https://investor.vanguard.com/investor-resources-education/taxes/offset-gains-loss-harvesting