What Should Investors Do Now That The Market is at an All-Time High?
Very few investors worry about their portfolios when they are printing new all-time highs. Just ask the seven richest people in the world…
- Jeff Bezos: $210 billion
- Elon Musk: $177 billion
- Bernard Arnault: $175 billion
- Bill Gates: $151 billion
- Mark Zuckerberg: $137 billion
- Larry Page: $121 billion
- Sergey Brin: $117 billion
The funny thing is, if you woke up with Sergey Brin’s fortune, there is not much you would think could go wrong from there.
But if Jeff Bezos woke up one day with Sergey Brin’s money, he may think there is A LOT wrong!
It’s all relative.
Which is why the answer to what you should be doing right now is also relative…relative to YOUR personal situation.
On the one hand, if your plan is solid, you have a well-diversified portfolio, and you have a good nest egg of cash to ride out a storm, you probably do not have a ton of work to do so long as nothing derails you behaviorally. Keep up with your cash balance while the market is at a record high, and continue to be financially unbreakable. Compounding is a powerful yet often overlooked force.
Need proof? Google the book on Warren Buffett called “How I made my fortune by compounding good returns over 75 years.” (Hint: it doesn’t exist because it would be a boring read.) Don’t work against the fantastic combination of compounding and time by creating avoidable losses.
Conversely, suppose you are still anxious over the 2020 sell-off, the resulting reduction in the dollar value of your portfolio, or you are worried about the NEXT future sell-off.
You have a fantastic opportunity RIGHT NOW to raise cash while the market is at an all-time high and stay invested in a long-term, straightforward, and compounding portfolio. You’ll likely weather the next storm better, since your cash will protect you from having to act rather than trying to react while in the middle of a downturn.
Investors should think in terms of adopting a “survival mentality”:
- Replenish cash at record stock market levels to survive short-term sell-offs.
- Build and maintain an investment portfolio to survive through a lifetime of needs and that outpaces inflation.
- Survive by steering clear of avoidable losses by way of eschewing the siren’s song of stock concentration and comparing yourself to others.
The financial services industry, alongside the media, does a fabulous job of creating complex behavioral issues and total confusion. This is why we go to great lengths to provide you with our unfiltered and straightforward opinion that is grounded in our Team’s expertise and experience.
If you want more control over your time and options, check out our Are We a Fit page and see if we are a good fit for each other. If so, reach out.
Keep looking forward.
David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s 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. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
Recent Posts
By David B. Armstrong, CFA
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, you should not assume that any discussion or information 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. No 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 Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. 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 website 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.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.
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 any reasonable 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.