Jose Luis Pelaez Inc | Digitalvision | Getty Images<\/p>\n
Data suggests the U.S. economy may be in a precarious spot<\/a> \u2014 and investors may be wise not to take outsized risks<\/a> with their portfolios for fear of steep losses, experts said.<\/p>\n “This is not the environment to be a hero in,” Callie Cox, chief market strategist at Ritholtz Wealth Management, wrote this month in a newsletter.<\/p>\n In other words: Stick to your long-term investment plan, including an appropriate asset allocation<\/a> and time frame to reach your goals, experts said. Avoid the temptation to funnel a big chunk of money into high-flying shiny objects like individual technology stocks or cryptocurrency, they said.<\/p>\n “You need to own a basket of quality assets and investments, hold your breath and let markets do their work,” Cox said in an interview with CNBC.<\/p>\n To be sure, this is sound perennial advice typically offered by financial planners.<\/p>\n But some market-watchers caution that economic headwinds could serve up ample volatility in the coming months.<\/p>\n “I think there are a lot of reasons to be optimistic, but also cautious at the same time,” said Winnie Sun, co-founder of Sun Group Wealth Partners, based in Irvine, California, and a member of CNBC’s Financial Advisor Council<\/a>.<\/p>\n Economic headwinds<\/p>\n Azbycx | Moment | Getty Images<\/p>\n The job market appears to have weakened considerably<\/a>, for example.<\/p>\n Employers in the public and private sectors added 35,000 jobs, on average, over the past three months, according to federal data<\/a>.<\/p>\n Job growth from May to July is happening at a “pace you normally see around or in recessions,” Cox wrote.<\/p>\n It’s also down from average monthly growth of 123,000 jobs during the same three-month period of 2024, and from 111,000 in the first three months of 2025.<\/p>\n More from ETF Strategist:<\/p>\n Here’s a look at other stories offering insight on ETFs for investors.<\/p>\n The size of the U.S. labor force has declined for three consecutive months, which hasn’t happened since 2011, Cox wrote.<\/p>\n “The job market is in a precarious spot after months of slowing consumer spending,” Cox wrote. “The American consumer drives the economy, and the economy ultimately drives the direction of markets,” she added.<\/p>\n Economists also worry about inflation reigniting<\/a> as tariffs levied by the Trump administration work their way into higher prices for consumer goods and services.<\/p>\n There have been some signs of that in recent months, and many economists expect that inflationary pressure to bite harder<\/a> in coming months.<\/p>\n ‘People are feeling like they’ll be left behind’<\/p>\n Despite these headwinds, experts say the economy isn’t in dire shape<\/a>. The stock market has also continued to march to new highs, with the S&P 500 stock index up about 10% since the start of the year.<\/p>\n Many of Sun’s clients have shown urgent interest in artificial intelligence and crypto amid lofty returns<\/a>, versus more bread-and-butter long-term planning, she said.<\/p>\n Shares in tech giants like Meta<\/a>, Microsoft<\/a> and Nvidia<\/a> are up about 34%, 24% and 36%, respectively, this year, for example. Bitcoin<\/a> prices are also up over 25%.<\/p>\n It’s a “hurry-up-and-invest” mindset, Sun said.<\/p>\n “A lot of people are feeling like they’ll be left behind,” she said. “But we don’t feel like we have the full picture yet on where the U.S. is economically.”<\/p>\n Tariff policy has whipsawed<\/a> in recent months, leaving markets and investors grasping for answers as new import duties are announced, delayed or rescinded in a rapid-fire fashion, according to market-watchers.<\/p>\n “Right now, we feel it’s best to stick with diversified and long-term plans,” Sun said.<\/p>\n “A lot of the decisions being made right now are not financially driven,” she said. “I think it’s much more emotions-driven.”<\/p>\n