A Volatile Market
Early 2026 has been a reminder that even strong markets don’t move in straight lines. After record highs in late 2025, the first quarter of 2026 delivered pullbacks, persistent inflation, and ongoing geopolitical problems, particularly in the Middle East and around global trade.
For high-earning executives, volatility like this isn’t just about your portfolio balance. It impacts your equity compensation, tax exposure, and future income trajectory. The right moves now can materially improve your long-term outcomes.
What should high income earners do during a volatile market?
During a volatile market be proactive, not reactive. Volatility creates planning opportunities. Start by rebalancing with purpose. Q1 likely pushed your portfolio out of alignment, especially if you hold concentrated positions in your employer’s stock or tech-heavy allocations. Focus your rebalancing on:
- Reducing concentration risk tied to your company stock
- Reallocating into undervalued asset classes
- Aligning your portfolio with your income risk (bonus + equity)
Should executives adjust equity compensation strategies in a down market?
Yes, adjust equity compensation strategies during a down market or risk missing out on possibly big opportunities. Market volatility directly impacts your stock option exercise decisions, RSU vesting value, and tax timing on equity income. Defaulting to a “wait and see” attitude often lead to higher taxes and more concentrated risk. Consider these actions:
- Exercising stock options at lower valuations (if aligned with your strategy)
- Stress-testing your exposure to a single stock
- Coordinating equity decisions with your broader tax plan
Is now a good time to do a Roth conversion in 2026?
A Roth conversion is potentially a good move now. If you are in peak earning years, a Roth conversion is more than a short-term play. It can be a long-term tax diversification strategy.
When markets are down the tax cost of converting is lower and future recovery happens inside a tax-free environment. A smart approach includes:
- Converting incrementally to avoid pushing into higher tax brackets
- Coordinating with bonus income or liquidity events
- Evaluating state tax exposure (especially relevant for Kansas and Missouri residents)
How can high earners reduce taxes during volatile markets?
Volatility creates tax planning leverage if used correctly. Look into the following tax strategies:
1. Tax Loss Harvesting, particularly if you expect large liquidity events, bonuses, or stock sales
later in 2026. If you have taxable investments at a loss:
- Offset capital gains from rebalancing or equity compensation
- Deduct up to $3,000 against ordinary income
- Carry forward additional losses for future high-income years
2. Strategic Timing:
- Deferring or accelerating income where possible
- Coordinating charitable giving strategies (e.g., donor-advised funds)
- Managing capital gains realization across multiple years
Should I increase retirement contributions during a downturn?
Yes, increase retirement contributions if your cash flow allows. Don’t wait until year-end. Investing earlier in a volatile or down market increases the potential for long-term growth. Be sure to:
- Max out 401(k) contributions earlier in the year
- Fully fund backdoor Roth IRA strategies
- Maximize Health Savings Account (HSA) contributions
Are HSAs really a good investment strategy for high earners?
Yes, when used correctly HSAs are one of the most tax-efficient tools available. For high earners,
this creates a triple tax advantage of tax-deductible contributions, tax-free growth, and tax-free
withdrawals for qualified expenses. Instead of using your HSA for current expenses:
- Invest the funds for long-term growth
- Pay medical expenses out of pocket
- Reimburse yourself tax-free in the future
What financial mistakes should executives avoid right now?
In April 2026, the most common missteps are:
- Overconcentration in employer stock during uncertain markets
- Letting equity compensation decisions happen without a tax strategy
- Sitting on excess cash instead of deploying it strategically
- Failing to coordinate across accounts (401k, brokerage, deferred comp)
- Reacting emotionally instead of executing a disciplined financial plan
Switch your attitude about this environment from volatile to a strategic window of opportunity. The combination of lower asset prices, tax planning opportunities and compensation flexibility creates a rare chance to reposition your financial life in a meaningful way.
The key to market volatility is coordination. Be sure your investment strategy, tax planning, and equity compensation decisions work in alignment and are tailored to your unique compensation structure, tax exposure, and life goals. This will help improve after-tax wealth over time, including during periods of uncertainty.
High income executives likely have more complex financial situations. Aspyre Wealth Advisors specialize in those complexities and we are not new to market volatility. Let’s talk and find out what opportunities you may have this year.