Learning from Volatility, Leaning into Discipline

In the earliest years of my career, I learned one of the most important lessons in investing: volatility isn’t the enemy—it’s the invitation.

Between 2007 and 2009, I witnessed the full force of market swings—the kind that make headlines and shake confidence. Back then, I didn’t have the benefit of hindsight. But what I did have was a front-row seat to how fast sentiment can change, how correlations tighten in crisis, and how quickly discipline can fray when fear takes over. It shaped the foundation of how we think about volatility at Somerset today.

Anecdotally—and meaningfully—today marks my oldest child’s 16th birthday. I was pregnant with her during that exact window of uncertainty. That season, marked both by market chaos and personal transformation, gave me a perspective I’ve never forgotten: you can be holding something fragile and something powerful at the same time. That’s how I think about markets during volatile periods, too.

The goal isn’t to avoid volatility. The goal is to build portfolios that can weather it.

That’s why non-correlated assets are a core part of our strategy. Alternative investments—whether private credit, real estate, or other vehicles—don’t move in lockstep with the public markets, and that’s by design. They’re typically valued on a different schedule, often quarterly, and less subject to the emotion-driven trading that defines much of the daily market movement.

It’s not just about smoothing the ride. It’s about staying invested through environments where traditional assets are struggling, and not being forced to sell into weakness. Non-correlation is what allows us to keep our seat at the table—confident, patient, and ready.

And when it comes to public equities? We are watchers. We are listeners. We are students of history. We know that drawdowns are a feature, not a bug. Which is why we’ve mapped out, in advance, what our moves will be should the market fall further from here. While we don’t predict, we do prepare.

We plan to re-enter equities with increasing conviction if we see pullbacks of:

• 15% – modest rotation into sectors with long-term strength,
• 25% – larger allocations into areas where valuations and fundamentals align,
• 40% – full-force capital deployment, reflecting historical opportunity.

This approach isn’t about market timing—it’s about knowing our thresholds before emotion clouds the view.

As always, we are here. Not just watching the markets, but walking with you through them.

Warmly,

Lauren