The Market Hit All-Time Highs. Now What Do You Do?
The Market Hit All-Time Highs. Now What Do You Do?
During the October and November sell off in 2023, we felt the market was oversold. These conditions had gone too far, valuations looked attractive, and the market was entering a seasonally favorable time of year.
Since then, the market has run in to all-time highs and we believe conditions are overbought, and valuations are stretched. Now what?
Investing into a market hitting all-time highs can be challenging because it typically means that asset prices are high, and the risk of a potential downturn grows. However, there are several strategies you can consider when navigating such a situation. Here’s our top 7:
- Risk Management: Profit taking, covered calls, stop-loss orders, and other risk management techniques help limit potential losses in case the market experiences a sharp downturn.
- Manage Your Liquidity: Maintain some cash or liquidity in your portfolio to take advantage of potential buying opportunities that present themselves after a pull back.
- Tactical Adjustments: Rebalance your portfolio to adjust for the prevailing market conditions. This may involve reducing exposure to high-risk assets and increasing exposure to more defensive investments.
- Diversification: Spread your investments across different investment strategies. This can help reduce the risk of significant losses if one sector or asset class experiences a downturn but allows you to participate in a continuing market rally.
- Dividend Investing: Focus on stocks that pay reliable dividends. Even if the market experiences a downturn, dividend-paying stocks can provide a steady income stream.
- Long-Term Perspective: Focus on your long-term investment goals rather than trying to time the market. Markets may go through cycles, but over the long term, they have historically trended upwards.
- Seek Professional Advice: Consider consulting with a financial advisor who can provide personalized advice based on your individual financial situation and risk tolerance.
To be successful, you need a plan. Homes aren’t built without a blueprint. We encourage you to work with a trusted advisor to have a plan in place for all market conditions. At Glacier Advisors of Raymond James, we provide a customized planning experience to allocate our clients wealth to investments that adjust to market conditions. Performance matters for your money, but so does managing risk.
- Brett Miller, CFA, CFP®
- Scott Miller, Senior VP - Investments
Dividends are not guaranteed and must be authorized by the company's board of directors.
Any opinions are those of Brett Miller and Scott Miller and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Past performance is not a guarantee of future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification.
