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Goals-based planning

Cutting through the noise: The power of goals-based planning

Venezuela, the Middle East, Ukraine and even Greenland remind us that the world can change in an instant. The effects of these events are felt both in the markets and in everyday life. In this context, we increasingly hear questions such as: Is the financial environment overheated? Are markets overvalued? Are we living in an artificial intelligence bubble?

These are valid concerns, especially after the rapid recovery and strong performance of certain sectors. But amid the noise, it’s essential not to lose sight of what matters most: keeping a long-term focus and avoiding hasty decisions.

Our keys to understanding the current context

  • Global Equities: While some markets have surged, we don’t see signs of a widespread bubble. In many regions, including the United States, corporate valuations are above historical averages, but they remain supported by earnings growth, strong balance sheets and a generally innovative environment.
  • Artificial Intelligence: The excitement is real and valuations are high, but they are backed by solid fundamentals and tangible adoption. As with any rapidly evolving sector, the key lies in careful selection and proper risk management.
  • Latin America: Local markets respond to their own cycles and factors. Our team constantly monitors political, economic, and currency risks, and recommends balancing a preference for domestic assets with global diversification to manage volatility and seize opportunities.

Behavioral science teaches us that we often react to the short term, sometimes at the expense of planning. That’s why pausing and aligning strategies with real goals is more important than ever.

When it comes to investing, the range of short-term outcomes is very wide, as noted by the 1-year rolling return (a gross difference of nearly 100% for equities). However, the further you go out in time, the more that range of outcomes narrows and brings clarity to your future (a gross difference of nearly 6% for equities). Hence, using goals-based planning allows you to be anchored to your long-term objective, which is more predictable than short-term outcomes.

Time and diversification can help reduce uncertainty for long-term investors

Rolling annualized total returns, 1950 – 2025

This chart shows the rolling annualized total returns from 1950 to 2025 for U.S. stocks, U.S. bonds, and a 60/40 allocation, with averages indicated by diamond markers.
Source: Barclays, FactSet, Federal Reserve, Robert Shiller, Strategas/Ibbotson, J.P. Morgan Asset Management. Returns shown are rolling monthly returns from 1950 to July 31, 2025. Stocks represent the S&P 500 Shiller Composite, and Bonds represent Strategas/Ibbotson government bonds for periods from 1950 to 2017, then Bloomberg Finance L.P. Barclays U.S. Treasury Total Return index from 2017 to 2024. 60/40 portfolio is rebalanced monthly and assumes no cost. Data as of December 31, 2025. 

Every investor is unique. Every wealth plan tells its own story.

The diversity of our clients in Latin America is one of our greatest strengths. Some prefer local markets; others opt for international diversification. Our wealth management approach is personalized, based on your goals and priorities: liquidity, lifestyle, legacy and growth.

Organizing your assets into clear compartments allows us to help you define appropriate levels of risk and liquidity, allocate capital efficiently and move forward with confidence, knowing your wealth is aligned with your true objectives.

Key questions for your planning:

  • Do you have major purchases or upcoming commitments?
  • How much liquidity do you need to feel secure?
  • What annual spending is required for your lifestyle?
  • What legacy do you wish to leave?
  • What portion of your wealth is dedicated to long-term growth?

Insights from behavioral science

Research shows that when goals are clearly defined and decisions are aligned with them, there is a decreased likelihood of falling into common behavioral biases, such as:

  • Recency bias: Giving too much weight to recent events, like geopolitical headlines.
  • Loss aversion: Valuing losses more than gains, which can lead to overly conservative decisions.
  • Mental accounting: Treating money differently based on its source, rather than its purpose.

Goals-based planning helps counteract these biases by providing a structured and intentional approach. It allows you to focus on what you can control (goals, risk tolerance and time horizon) instead of reacting to market noise.

Below is a perfect example of the constant march of volatility, potentially driven by “white noise”. As you can see, it’s not a bug; it’s a feature.

Despite intra-year swings, equities tend to reward investors over time

S&P 500 intra-year declines (max drawdowns) & calendar-year price returns

This chart shows S&P 500 intra-year declines (max drawdowns) and calendar year price returns from 1985 to 2025.
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management - Guide to the Markets. Returns are based on price index only and do not include dividends. Intra-year drawdowns refer to the largest market declines from a peak to a trough during the year. Return shown are calendar year returns from 1980 to present year. Data as of December 31, 2025.

A plan to move rorward with confidence

Organizing your assets into specific compartments (liquidity, lifestyle, legacy and growth) enables you to appropriately determine the levels of risk and illiquidity in each. This approach facilitates efficient capital allocation, answers key questions, and offers the peace of mind that your wealth serves the purpose for which it was designed.

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GENERAL RISKS & CONSIDERATIONS

Any views, strategies or products discussed in this content may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this content should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

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Certain information contained in this content is believed to be reliable; however, J.P. Morgan does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this content. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this content, which are provided for illustration/ reference purposes only. The views, opinions, estimates and strategies expressed in this content constitute our judgment based on current market conditions and are subject to change without notice. J.P. Morgan assumes no duty to update any information on this website in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of J.P. Morgan, views expressed for other purposes or in other contexts, and this content should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this website shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this website shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions

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In an environment marked by volatility and unpredictable headlines, staying calm and focused on financial goals is key.
Published Feb 25, 2026

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