Of all the catchphrases we hear about the stock market, the one that sticks out to me right now is “cash is king”. Others are “the market climbs a wall of worry” and “buy the rumor, sell the news”. If you're willing to “ride out the storm”, good luck with that. With the massive swings in market values experienced from early 2020 through the present, you must surely know by now that volatility (the range from high to low in the stock market) is increasing. With the speed of digital information accelerating every year, the correlation coefficients of formerly divergent asset classes has narrowed. In English, that means, things (asset classes) which used to provide “diversification” in a portfolio, no longer serve to improve it by much. That means that among the best “risk-reducer“ strategies available to most people is to raise the level of cash in your portfolio. If you have a problem selling stocks or funds because you're worried about paying taxes on the gains, well, that thought brings up another of my favorite market quotes “don't let the tax tail wag the dog”. We would be happy to review your current investment allocations and give you our thoughts. Just reach out to us today!
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