The Dog Days of Summer

Well, this market brings new meaning to the phrase “Dog Days of Summer.”  Despite the market, please be patient and stay the course with your investment allocation.  This is not the time to shift investment dollars to cash/emergency funds.

For all clients, I recommend you have an investment “bucket” and a ready cash/emergency reserve “bucket.”  For most people that are more than three years from retirement, their ready cash/emergency reserve equals about a year of living expenses.  For most people that are within a few years of retirement, and for those that are retired, the ready cash/emergency reserve should be closer to three years of living expense needs that are not met by Social Security, pensions, etc.  The large cash reserve for retirees and near-retirees allows you to withstand market turbulence.

Please avoid the urge to shift your investment dollars to your emergency reserve bucket.  People who sell out of the market at a low point will invariably re-enter the market at a much higher level.  It is a losing endeavor.  If this market is making you rethink your risk tolerance and asset allocation, please contact me so we can discuss your situation personally.