At Banyan Global Investment Advisors we keep it simple and understandable.
This is always the hardest time to talk about the market. We’d all like to buy when we want or sell when we want but rarely do we have the opportunity to do that in the stock market So here we are and you’ve got to invest, so what do you do, you can buy sell or wait.
In my view your time frame makes the difference. If you need your investments to pay for whatever sell is what you have to do. To wait is a possible answer but then we have to tie up Money in some fixed income which can yield from 1.50 or so on short treasuries to a money market fund yielding a little more. But what are you waiting for. I tell my clients that I don’t know where the market will be tomorrow but I know in ten years it will be higher.
One solution I like is having a higher percentage of your portfolio in cash. In our taxable accounts we typically keep 10% in cash so should the unforeseen happen we have firepower to purchase assets at lower or distressed prices. This means we are 90% invested at all times so we capture most but not all of any expansion. What I do k ow is having the cash around enables us to think clearly in times of stress. We also don’t have much single stock exposure and 80% of our equity exposure is in the S&P 500 (Listen to Victor Haganis TedTalk on where are all the billionaires? (It’s posted on our page). I like simplicity so it’s not more simple than that.
We are wealth managers, financial planners and investment students. What we know is when we do things in the market emotionally we increase our mistakes exponentially. At Banyan Global Investment Advisors we keep it simple and understandable.