David B. Armstong, CFA® is Co-founder and CEO at Monument. He is an entrepreneur, portfolio manager, philanthropist, board member, and frequent conference and podcast speaker. He is also a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel.
“Everybody in the world is a long-term investor until the market goes down.” – Peter Lynch
I know I sound like a broken record. I get it. But don’t tune out just yet—because while every selloff feels different, the right approach stays the same.
If you’ve been investing long enough, you know the cycle: markets go up, markets go down, and sometimes the down happens faster than the up. What’s happening now isn’t new, but that doesn’t make it any easier.
Let’s break it down.
What Doesn’t Work in a Market Selloff
1) Following the Loudest Voices
Market selloffs bring out the loudest voices in financial media. Fear sells. You’ll see bold predictions of recessions, bear markets, and financial doom.
Need proof? History is full of bad forecasts:
The feared “double dip” recession in the early 2010s? It never happened.
The Economic Cycle Research Institute’s 2011 recession call? Wrong.
The supposed “Lost Decade” after 2008? Didn’t happen.
The IMF’s 2020 global recession warning? Many economies rebounded fast.
The 2022–2024 yield curve inversion? Supposed to signal an imminent downturn—yet growth persisted.
Even Nouriel Roubini, who nailed 2008, has made multiple bad recession calls since.
There are no facts about the future. Everyone is guessing. Reacting to every headline leads to bad decisions. No one has a perfect track record of calling market tops or bottoms.
Instead of getting caught in the noise, focus on what you can control: your time horizon, cash reserves, and risk tolerance.
2) Searching for a Magical Signal
Every time markets drop, people try to time the bottom, as if there’s a secret “buy” signal. There isn’t. Just like there isn’t a clear signal for market tops.
Sure, traders analyze moving averages, support levels, and trendlines. That’s fine—we do it too. But markets don’t move in straight lines. Waiting for the perfect entry point often leads to doing nothing… or worse, buying back in after prices have already rebounded.
3) Panicking and Selling Out
Selling after a drop is the worst strategy—especially if you already have cash set aside for planned expenses.
Markets rise over time, but the path isn’t smooth. Consider this:
The S&P 500 averages a 5% drop every 3.5 months.
A 10% drop happens every 11 months.
This is normal. Selling during these declines locks in losses and guarantees missing the recovery.
What Does Work
At Monument, we keep it simple.
1) Have a Cash Reserve
This serves two purposes:
A Hedge – Forget options, structured notes, hedge funds, or illiquid alternative investments. Cash is THE BEST and CHEAPEST hedge against market corrections—especially when it carries a good interest rate relative to inflation.
A Buffer – Our planning strategy sets aside 12–18 months of cash when markets are strong. We top it off over time so that when downturns happen, you’re not forced to sell at a bad time.
2) No Guessing
No matter what people are saying on TV, there are no facts about the future.
If your portfolio was built correctly from the start, there’s no need to react to short-term movements. Every investment decision should be rules-based and aligned with long-term goals—not short-term emotions.
Final Thoughts
Market corrections are uncomfortable, but they’re part of investing. What doesn’t work is trying to outguess the market, reacting to short-term fear, or searching for a perfect signal that doesn’t exist.
What does work is having a plan—a plan that includes cash reserves, discipline, and an understanding that markets go up over time, but not in a straight line.
If you’re feeling anxious about the current selloff, let’s talk.
IF you are limited in space: Create a dedicated link that will take a reader directly to the dedicated disclosure. This is ok when it is an electronic posting. Make sure it is conspicuous at the end of the post: PLEASE SEE IMPORTANT DISCLOSURE INFORMATION at www.monumentwealthmanagement.com/disclosure
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, no portion of this discussion or information serves as the receipt of, or a substitute for, personalized investment advice from Monument. contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Neither Monument’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Monument’s current written disclosure Brochure and Form CRS discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify anyreasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
Market Commentary
Market Selloffs: What Doesn’t Work and What Does
David B. Armstrong, CFA
David B. Armstrong, CFA®
David B. Armstong, CFA® is Co-founder and CEO at Monument. He is an entrepreneur, portfolio manager, philanthropist, board member, and frequent conference and podcast speaker. He is also a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel.
“Everybody in the world is a long-term investor until the market goes down.” – Peter Lynch
I know I sound like a broken record. I get it. But don’t tune out just yet—because while every selloff feels different, the right approach stays the same.
If you’ve been investing long enough, you know the cycle: markets go up, markets go down, and sometimes the down happens faster than the up. What’s happening now isn’t new, but that doesn’t make it any easier.
Let’s break it down.
What Doesn’t Work in a Market Selloff
1) Following the Loudest Voices
Market selloffs bring out the loudest voices in financial media. Fear sells. You’ll see bold predictions of recessions, bear markets, and financial doom.
Need proof? History is full of bad forecasts:
Even Nouriel Roubini, who nailed 2008, has made multiple bad recession calls since.
There are no facts about the future. Everyone is guessing. Reacting to every headline leads to bad decisions. No one has a perfect track record of calling market tops or bottoms.
Instead of getting caught in the noise, focus on what you can control: your time horizon, cash reserves, and risk tolerance.
2) Searching for a Magical Signal
Every time markets drop, people try to time the bottom, as if there’s a secret “buy” signal. There isn’t. Just like there isn’t a clear signal for market tops.
Sure, traders analyze moving averages, support levels, and trendlines. That’s fine—we do it too. But markets don’t move in straight lines. Waiting for the perfect entry point often leads to doing nothing… or worse, buying back in after prices have already rebounded.
3) Panicking and Selling Out
Selling after a drop is the worst strategy—especially if you already have cash set aside for planned expenses.
Markets rise over time, but the path isn’t smooth. Consider this:
This is normal. Selling during these declines locks in losses and guarantees missing the recovery.
What Does Work
At Monument, we keep it simple.
1) Have a Cash Reserve
This serves two purposes:
2) No Guessing
Final Thoughts
Market corrections are uncomfortable, but they’re part of investing. What doesn’t work is trying to outguess the market, reacting to short-term fear, or searching for a perfect signal that doesn’t exist.
What does work is having a plan—a plan that includes cash reserves, discipline, and an understanding that markets go up over time, but not in a straight line.
If you’re feeling anxious about the current selloff, let’s talk.
Keep looking forward.
Make life option rich.
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BLOG DISCLOSURE
IF you are limited in space: Create a dedicated link that will take a reader directly to the dedicated disclosure. This is ok when it is an electronic posting. Make sure it is conspicuous at the end of the post:
PLEASE SEE IMPORTANT DISCLOSURE INFORMATION at www.monumentwealthmanagement.com/disclosure
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, no portion of this discussion or information serves as the receipt of, or a substitute for, personalized investment advice from Monument. contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Neither Monument’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Monument’s current written disclosure Brochure and Form CRS discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify anyreasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.