How to Protect Your Investments in 2025 and Beyond: 7 Strategies

If your 2025 has been anything like mine, you’re probably seeing headlines about trade disputes and impending recessions, all while trying to cut costs and afford your favorite snacks at the grocery store. At this point, you may be wondering whether to save more money in your emergency fund or how to protect your investments now and in the future.

I get it, and I’m right there with you. Although I read and write about finances every day, I still get worried, too. When those fears come up, however, I remind myself to return to the basics. I know that to build wealth, protect my investments, and create a stable life for my kids, there are tried-and-true strategies to follow. Here are seven of them.

Table of Contents

1. 1. Build an emergency fund
2. 2. Consult a financial advisor
3. 3. Identify your risk tolerance
4. 4. Use several types of investment accounts
5. 5. Diversify your investments within your accounts
6. 6. Consider investing in real estate
7. 7. Don’t believe the hype

1. Build an emergency fund

• Protects investments during: job loss, unexpected expenses, recession worries

Before you consider investing in the market, the most important way to protect your investments is to build a cash emergency fund. The reason is that a cash emergency fund acts as insurance if you have an unexpected expense or job loss. I recommend saving at least three months’ worth of income if you have a fixed income and at least six if you have variable income.

If you have money set aside for the unexpected, you are less likely to pull money out of the market. Not only that, but a recent Vanguard study showed that when you have $2,000 of savings set aside, you actually worry far less about money. In other words, your emergency fund protects your investments and your mental health. I call that a win-win.

I always recommend maintaining a healthy cash reserve of three to six months’ worth of living expenses; life is unpredictable, and it’s essential to be prepared. Staying diversified, regularly rebalancing your accounts, and avoiding emotional, panic-driven selling are all key to long-term investment success. This is where working with a financial advisor can make a significant difference. 

2. Consult a financial advisor

• Protects investments during: life transitions, estate planning, and stressful economic seasons

The next step to take to protect your investments is to meet with a financial advisor. An experienced advisor can help answer questions about how to protect investments from inflation and address other long-term concerns, like how to protect investments from nursing home expenses and how to protect your investments for your future heirs.

An advisor can help you protect your assets for future generations by creating an estate plan, setting up trusts, and helping you choose a life insurance policy. They can also help guide you through the other steps on this list.

Mostly, it’s helpful to have an experienced professional guide you and remind you of your long-term goals when you’re worried or stressed.

If you’re unsure whether you need to hire an advisor or where to start, you can book a free session with a real advisor via Money Pickle with no strings attached.

3. Identify your risk tolerance

• Protects investments during: market fluctuations, recessions

The U.S. Securities and Exchange Commission (SEC) advises investors to understand their comfort level when investing. Typically, younger investors can have more aggressive portfolios, while investors nearing retirement tend to be more conservative. Either way, knowing how much volatility you’re willing to handle can help you plan long term.

Identifying your risk tolerance can also help you determine how much money to keep in an emergency fund and how much to invest. If you need help deciding on an approach, you can always consult a financial advisor for guidance.

4. Use several types of investment accounts

• Protects investments during: personal emergencies, tax law changes

Once you know your investment risk tolerance and you have an emergency fund in place, it’s time to make sure you’re invested in several different types of accounts. That way, you have options, whether you need to access money before retirement or want to benefit from the tax advantages some accounts offer.

Here are some examples of investment accounts. There’s no one-size-fits-all approach when it comes to the types of accounts you should have, but choose at least one for investments you might want to liquidate in the near future and at least one for retirement.

• 401(k) or traditional IRA: These two types of accounts are tax-deferred retirement accounts. Investors use these for long-term savings goals, like retirement. It’s especially helpful to take advantage of these accounts if your employer offers a match.
• Roth IRA: A Roth IRA is another type of retirement account that provides more flexibility than a 401(k). For example, you can choose to take out $10,000 towards a first home purchase without penalty.
• Gold IRA: A gold IRA is another type of investment account that allows you to store precious metals in an IRS-approved depository. One company that offers this is American Hartford Gold.
• Health Savings Account (HSA): An HSA is known as a triple tax advantage account. With this account, you can pay for medical expenses tax-free. 
• Taxable brokerage account: This type of investment account doesn’t come with the tax benefits of retirement accounts. However, you have the flexibility to withdraw your funds without restrictions.

While you don’t need to open every type of investment account listed above, having a variety can help protect your wealth in the future. That’s because you’ll have options if you want to access money without incurring fees or penalties. 

5. Diversify your investments within your accounts

• Protects investments during: trade disruptions, recessions

Not only is it important to diversify your investment accounts, but also the assets you hold within those accounts. The Financial Industry Regulatory Authority (FINRA) put it succinctly: “Don’t put all your eggs in one basket.” If you only invested in one company, for example, and that company went out of business, you’d lose everything.

So, it’s important to diversify your investments across multiple sectors and industries, whether that’s healthcare, energy, technology, retail, or precious metals. If you are unsure of the asset distribution you should have or if you’re diversified enough, consider consulting a financial advisor.

Here are examples of different types of assets you can have. As a good rule of thumb, choose the ones that align best with your risk tolerance and long-term goals:

• Stocks: Shares of publicly traded companies
• Bonds: U.S. Treasury bonds, corporate bonds, or bond mutual funds
• Exchange-traded funds (ETFs): A diverse group of investments you can trade as one stock that usually follow a certain index
• Mutual funds: These are baskets of funds that typically come with management fees
• Precious metals: Gold, silver, etc.
• Cash: Treasury bills, money market funds, or high-yield savings accounts.

6. Consider investing in real estate

• Protects investments during: stock market volatility, inflation, housing shortages

Another type of asset that deserves its own category is real estate. If you feel like the stock market is too stressful for your risk tolerance or you want to diversify further, there are many different ways to invest in real estate. Of course, the most straightforward way is to own a home or to own rental properties.

However, there are other options, such as investing in Real Estate Investment Trusts (REITs) that allow you to invest in real estate without having to be a landlord and fix a toilet in the middle of the night. Like the other types of investments discussed, it’s important to choose options that you understand and feel comfortable investing in.

Although a USA Today article showed data that the stock market has had better returns than real estate over time, what real estate offers investors is control. Many people who own real estate appreciate the ability to decide to improve it, rent it out, and acquire more of it over time to hedge against inflation and stock market volatility. 

7. Don’t believe the hype

• Protects investments during: panic selling, sensational headlines

Once you’ve learned about your investing style, built a diversified portfolio, and set aside an emergency fund, it’s important to be aware of economic news without getting caught up in the hype. Sometimes sensational headlines cause people to panic sell (something one of my co-workers did during the 2009 recession and regretted later).

In the short term, the market will fluctuate, but if you’re interested in building wealth, focus on long-term gains. There have been significant market swings already in 2025 due to uncertainty about tariffs and fears of an even bigger market correction. However, the dollar is not collapsing, and the United States is not currently in a recession. 

Research from J.P. Morgan Wealth Management shows that historically, the average stock market return has been 10%. However, over the last eight years, the returns have been better at just over 11%. In sum, to protect your wealth, focus on long-term returns, not short-term fluctuations (and definitely not on scare-tactic headlines).

The most notable examples of smart (and not so smart) choices around investments involve those who panic sell and lock in losses versus those who stay invested and allow their portfolios time to recover and grow. While the outcome can depend on the client’s age and time horizon, more often than not, clients who remain invested experience stronger long-term portfolio growth. In contrast, those who sell during downturns often struggle, both financially and emotionally, with deciding when to re-enter the market.