As we head into summer, many University of Maine faculty members are thinking about their financial futures—perhaps reviewing retirement accounts during the quieter months or considering how recent market movements have affected their portfolios. If you've been feeling uncertain about investing during turbulent times, you're not alone. Market volatility can feel unsettling, but history shows us that staying invested through both ups and downs is often the key to long-term financial success.
The Case for Investing Through Down Markets
It might seem counterintuitive, but some of the best investment opportunities actually occur during market downturns. When stock prices fall, you're essentially buying shares at a discount—more shares for the same dollar amount. This concept, known as dollar-cost averaging, can work particularly well for faculty members who contribute regularly to retirement accounts.
Consider this real-world example: An investor who contributed $500 monthly to the S&P 500 from 2000 to 2020 would have experienced three major market downturns—the dot-com crash, the 2008 financial crisis, and the early 2020 pandemic selloff. Despite these significant drops, their consistent investing approach would have resulted in an average annual return of approximately 6.1%, turning their $126,000 in contributions into roughly $193,000.
The key insight? Those who stopped investing during market downturns missed out on purchasing shares at lower prices, which ultimately hurt their long-term returns. For example, if someone had tried to “time” the market and opted to sell off stock this past April 4th (2025) when the S&P 500, they would have missed the S&P 500 bouncing back on April 9th to 9.5%.
Historical Perspective on Market Recovery
Market volatility is normal, even if it doesn't feel that way in the moment. Since 1950, the S&P 500 has experienced a correction (a decline of 10% or more) approximately once every two years. Yet over the same period, the market has delivered positive returns in about 70% of all years.
More importantly, the market has historically recovered from every downturn. The average time for the S&P 500 to reach new highs after a bear market has been roughly 22 months. For faculty members with decades until retirement, these temporary setbacks represent opportunities rather than obstacles.
Expanding Your Investment Options: Self-Directed Brokerage Accounts
Speaking of opportunities, many university employees may not realize they have access to a powerful tool that can significantly expand their investment choices: self-directed brokerage accounts within their retirement plans.
Traditional employer-sponsored retirement plans typically offer a limited menu of mutual funds—perhaps 15 to 25 options. While these core offerings are professionally selected and often sufficient for many investors, a self-directed brokerage account can open up thousands of additional investment options, including:
Individual stocks and bonds
Exchange-traded funds (ETFs) with lower expense ratios
Sector-specific or international funds not available in your plan's standard lineup
Real Estate Investment Trusts (REITs)
Target-date funds from different fund families
This expanded universe can be particularly valuable for faculty members who have specific investment knowledge or interests related to their academic expertise. For instance, a professor in the School of Marine Sciences might want exposure to clean energy ETFs, while someone in the Business School might prefer to build a diversified portfolio of individual dividend-paying stocks.
At Provision Wealth Planning, we assist our clients in setting up and managing their self-directed brokerage accounts. This allows us to create a clear investment strategy for all of the families we partner with both while they’re employed and throughout retirement.
Making the Most of Market Volatility
Rather than viewing market volatility as something to fear, consider these strategies to make it work in your favor:
Continue Regular Contributions: If you're contributing to a 403(b) or other retirement account through payroll deduction, maintain those contributions even when markets are declining. You'll be buying more shares when prices are lower.
Consider Rebalancing Opportunities: Market volatility can throw your asset allocation out of balance. A significant stock market decline might mean it's time to rebalance by moving some money from bonds back into stocks, essentially buying low. This is something our team handles for our clients at Provision Wealth Planning; we tailor everyone’s investment strategy to their unique portfolio needs and goals.
Review Your Risk Tolerance: Use volatile periods as opportunities to honestly assess whether your current investment mix aligns with your comfort level and time horizon. If you're losing sleep over market movements and you're still 15 years from retirement, your portfolio might be too conservative.
Explore Your Self-Directed Options: If you haven't looked into your plan's self-directed brokerage account option, market volatility might be an ideal time to explore additional investment choices that could complement your existing holdings.
The Academic Advantage
University faculty often have a unique advantage when it comes to long-term investing: job security and predictable income streams. Unlike professionals in more volatile industries, most faculty members can count on steady employment and regular paychecks, making it easier to maintain consistent investment contributions regardless of market conditions.
This stability allows you to take a truly long-term view of investing, focusing on building wealth over decades rather than worrying about quarterly fluctuations.
Moving Forward with Confidence
Market volatility is an inevitable part of investing, but it doesn't have to derail your financial plans. By maintaining a long-term perspective, continuing regular contributions, and potentially expanding your investment options through self-directed accounts, you can use market turbulence to your advantage.
Remember, every faculty member's situation is unique. Your investment strategy should reflect your individual goals, timeline, and risk tolerance. If you're unsure about how to navigate current market conditions or whether a self-directed brokerage account makes sense for your situation, consider working with a financial advisor who understands the specific benefits and challenges facing university employees.
The path to financial security isn't about timing the market perfectly—it's about time in the market, consistent contributions, and making informed decisions that align with your long-term goals. Even in uncertain times, those fundamentals remain your strongest allies.
We’re honored to be a partner for our clients. If you have any questions, feel free to send us an email—we’re always here to help. And if you know someone who might find this valuable, feel free to forward this onto them.
If you're not yet a client but something resonated with you, we’d welcome the opportunity to connect—click here to schedule a call.
