What were we thinking?
Late-cycle is when we tend to make unforced errors in our financial life. My spidey-senses have been tingling due to a series of macro-events that I’ve noticed.
Wars of choice (trade, diplomatic and conventional) on multiple fronts
Tax cuts and borrowing increases into a strong economy
Rising interest rate environment -- across all durations
Blockchain implosions
A study noting 76% of newly-minted IPO companies were loss-making at listing
I last felt like this in 2005. Then, and now, the party can continue for a long time.
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What to do?
Rebalance - once a quarter, reset to my target weightings.
Consider leverage - don't borrow to buy stuff you don't need. Pay cash, or wait.
Stay invested - Stay the course. Each time you make a change, you introduce an opportunity for error to enter your life.
Do you remember 2009-2012? It probably seems like ancient history to many. There will be great times for new investments in all of our futures.