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The Dow is at around 28,000, so what should investors be doing? Well, a lot, actually.

Most people remember that last year around this time the market was not doing very well. Reflect back on how you felt when the market went down almost 20% by Christmas Eve’s close.

It impacted everyone – even really, really wealthy people. Just as an example, (with some round numbers for easy mental math), assume someone with $100MM lives off of $5MM a year, is 100% invested in the equity market and hoping they will get a 10% return on their portfolio over the next 12 months. Since they were 100% invested, when the market went down 20% they saw a loss of $20MM at the end of the year…and needed to raise $5MM for 2019 expenses. So, their $100MM equity investment portfolio turned into $75MM…a $20MM loss and $5MM in cash that they would spend over 2019.

It’s an instructive exercise to be thinking about since the market is up nicely, which should be making everyone feel pretty good.

What Should Investors Be Doing Now?

So, the question is, “What do we do now?”  Well, I’ve got a suggestion.

At this point I first want to address the “Broken Record” issue. For those of you that read every missive I publish, I get it…you probably roll your eyes every time I write the same thing. But consider this: if everyone who reads my blog actually had a plan and followed it, I wouldn’t be writing about it all the time.

Knowing information is different than acting upon it, and that’s why I keep communicating my basic conviction. People know that smoking is bad for them, they know that eating too much is bad for them and they know that exercise is imperative. In fact, that message is a broken record, too, right? Quit smoking, eat less and exercise more…yet this country is still plagued by obesity, diabetes and horrible side effects of choosing to smoke.

Have a Plan to Raise Cash when the Market’s Up

I know I sound like a broken record when I talk about having a plan and specifically a plan to raise cash, but there are a lot of people that invest without a plan (or without any accountability to a plan). Instead, they live and die by the emotions of fear and greed – like selling in December of 2018 out of fear and holding in December of 2019 out of greed.

LET ME BE CLEAR – I’m not saying people should be selling now because the Dow is at 28,000.

What I’m advocating is forecasting out the next 12-18 months by asking yourself if you need cash for anything. Do you need cash for, say, a big project, a house purchase, a renovation, college expenses, or anything else?  Is there a POSSIBILITY that you will need cash? Do you know you need cash out of your portfolio to live during retirement?

Forecast then raise it. Make a plan or tune up your existing plan because now is a great time with the Dow at 28,000.  I know it doesn’t seem that complicated and I know it doesn’t seem that sophisticated, but it really is just that simple.

Even people with $100MM portfolios should be doing this planning – think about that for a second.  If you plan out when you need cash and can raise it when the market is up, then that’s what you should be doing. If you don’t need the cash, then I don’t think you should be doing anything.

I’m at peace with being a broken record because I know planning things out is the right thing to do.  And for the haters out there that think this is just basic advice and my drumbeat is not valuable, I ask this – what advice are you getting that is better and more cost effective than hedging against a possible 12 to 18-month downturn by holding cash?


We remain at MONCON 5. I maintain that it has kept us from incorrectly reacting to the news cycle.

Speaking of the news…

The Danger of Basing Your Portfolio off Popular Political News

We all know that the House of Representatives began public impeachment inquiry hearings, and there has been some speculation that “Phase One” of a trade deal with China has had some shade thrown on it. It would be easy to argue the S&P 500 should have been down a lot more than -0.38% last week! I mean, Kenneth Starr, the special prosecutor in the Whitewater investigation of President Clinton was quoted in a recent Bespoke report as saying Ambassador Sondland’s testimony had “the potential to be a game-changer.”

But the reaction to his “game-changer” testimony was the S&P 500 down -0.38%. This is the danger of leaning into portfolio decisions based on popular political news. Keep this in mind as we draw closer to the 2020 national election. If you are worried about the election, my broken record idea is the best hedge.

As for what I think now, well I think the global economy will remain bogged down until there are real assurances on trade, fiscal policies, Brexit, regulatory changes and the U.S Presidential elections. I think that keeps businesses and consumers from openly spending in a meaningful way until the band-aides are replaced with real, longer-term solutions.

I also think that global monetary policy will remain very accommodative so long as inflation remains subdued, which a lot of folks (myself included) expect for many more years. Global competitive pressures, technology and industry disruptors across all sectors will be at work for what I see as the foreseeable future. I think that favors the equity investors for a while, but we will also see the inevitable dips and volatility along the way.

Call with questions or if anyone at Monument can help – especially as we get closer to the end of the year and you want to learn about charitable giving options.

Keep looking forward,


What’s Next?



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