Gut Check in Rocky Markets

From the Archives of TGIF 2 Minutes comes one of the “Top 5 most read of all time” editions – updated for 2026.

Have you asked yourself lately…

• • “Is this the market downturn everyone has been cautioning about?”
  • “Is now the time to sell my stocks?”
  • “Should I be unloading my bonds?”

Although I stress to clients and friends not to listen to the media’s “talking heads” amidst dramatic market moves — and then make rash investment decisions – we are all human! It is nearly impossible to tune out the noise in the news and markets. Recently, stock markets have pulled back and bounced around. Still, amidst all of the action, the most important message remains: do not let short-term market moves trigger fear and lead to poor financial decisions.

Below is a quick reality-check list to help confirm whether you can stick to your current investment strategy, given you started with a thoughtful plan in place:

1. 1. Cash level – Is your level of cash sufficient for your current (3-6 months) essential expenses?
   2. Do you still have your job? (as in, your income)
   3. Do you have an Emergency Fund intact? (6-12 months worth of essential expenses as a savings buffer in case of a job loss or emergency)
   4. Do you have a Financial Plan in place? (For help with what this means, please call me.)
   5. How is progress toward your short-term and long-term financial goals?
   6. Is your Asset Allocation still roughly intact (i.e. your long-term “set” proportion of Stocks vs. Bonds vs. Cash)?
   7. When is the last time you heard from your Financial Advisor?
   8. Feeling uneasy? If YES, which is perfectly reasonable, what is keeping you up at night? Please see below.
   9. Why are you investing in the first place? (See # 4 above) Is it for later in life? Or for retirement within the next 2-3 years? To live on current dividends and interest from your investments? Kids’ college? Aspirational lifestyle goals?

If you can answer YES to # 1-6, then there is little to no reason to sell any or most of your investments in a rocky or down market. If you have been waiting for a market decline as a “buying opportunity” to invest a portion of your cash, then it makes sense to speak with your financial advisor about how to deploy cash according to an agreed upon Asset Allocation.

If you notice fear creeping in, identify what, specifically, that you are afraid of:

• • Is it “losing everything”?? With history as a guide, the “losing everything” scenario is extremely unlikely—unless you have an outsize percentage of your monies invested in a narrow list of securities or have most of your monies tied up in a business (these are two examples of not being adequately diversified).
  • Are you scared of not being able to achieve retirement?? This fear is more a matter of how much you spend on lifestyle than how much a stock or bond portfolio declines. It may be a matter of analyzing a current portfolio and amounts being added to the portfolio periodically.
  • Is it that you will run out of cash?? Try asking yourself: What is my timeline to retirement or a specific spending goal? How much cash do I currently hold toward that goal?
  • Do you have a “peace of mind” amount of cash on hand today? Yes, “Cash is King” for that peace-of-mind feeling. Although holding too much cash can hold back a portfolio from keeping up with inflation over the longer-term. Talk with your financial advisor about an intelligent amount of cash to have on hand.

Please do not hesitate to call me to talk through your situation or stress-test your current plan.

Consult with a tax professional on ALL tax matters and tax planning. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied upon for, tax, legal or accounting advice.