I should have known better. Just as the Dow Jones Industrial Average neared the 50,000 milestone in early January, a producer called to interview me about what was pushing stocks higher.
Soon after, stocks retreated but then recovered. The Dow finally broke through the 50,000 level on February 6. Concurrent with stock market gyrations, other assets, like precious metals and crypto, took investors on a wild ride.
Here’s what we have learned from the first five trading weeks of the year:
1. Beware of the bandwagon
After the 2024 presidential election, bitcoin crossed the 100,000 mark, as investors believed that President Donald Trump would be true to his promise of being the first “crypto president.”
His administration was filled with crypto-friendly people, who watered down regulations, prompting all sorts of investors to buy into the craze. Bitcoin did soar above $126,000 in October 2025, but just a few months later, its value has almost been halved. Ouch.
2. Beware of the NEXT bandwagon
Some investors who didn’t get their buy orders in for crypto were lured into gold and silver, which have enjoyed massive gains over the past year or so.
Considering that my career started as a gold, silver and copper options trader on the floor of the Commodities Exchange of New York, I can state with certainty: Beware of the whippy nature of commodities markets!
Like Bitcoin, some wanted a piece of the action, but they soon learned just how much commodities can whip around. On Friday January 30, gold plunged 9 percent, and silver lost a quarter of its value… in just one day.
3. If you do jump on the bandwagon, limit your exposure
Let’s say you ignore the advice above and want to be part of the mania associated with speculative investments like cryptocurrency, commodities, or even individual stocks. If that’s the case, then limit the amount invested to under 5% of your total investments. By doing so, you can manage risk while still allowing for potential upside.
Think of it this way: If 5% of your portfolio loses half of its value, you’ve only lost 2.5% of your total invested wealth. That’s recoverable. But if 30 or 40% of your portfolio is concentrated in a volatile asset that crashes, you’re looking at losses that could take years to recoup, potentially derailing your retirement plans or other financial goals.
For the core of your portfolio, maintain a diversified portfolio of low-cost index mutual or exchange traded funds. These “boring” assets won’t make headlines, but they should provide the long-term growth you need and the diversification among various asset classes should help you weather market turbulence. Use volatile assets as the spice in your investment recipe, not the main course.
4. Avoid daily market check-ins
Most of us are saving for a long-term goal, like retirement or college, which is likely years or decades in the future. Reviewing market action on a daily basis will not help you achieve those goals, but it might encourage you to act — and that’s rarely going to work out in your favor.
5. Don’t keep money you need in a volatile asset
Do you need to make a house down payment, purchase a car or pay a tuition bill within the next 12 months? Did you “forget” to free up that money and now it’s stuck in something that has gone down in value?
If so, that money should never have been at risk at all, so admit that you blew it and get whatever you need out and keep it in a safe savings, checking or money market.
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at askjill@jillonmoney.com. Check her website at www.jillonmoney.com.
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