Always Carry an Umbrella

As an advisor who works with individual investors, I have learned to be sensitive to both direct and indirect signals that clients give when voicing their thoughts on the market. For the past month, without exception, all client feedback has had one main theme: 'The market makes no sense to me. Is it time to take more money off the table?'

This kind of drumbeating for retreat tees up conflicted feelings for experienced managers: on the one hand, individual investors are much smarter than the professional investor class give them credit. Individual investors are often closer to the real economy and see, hear and feel things that talking heads in the media bubble ignore. On the other hand, a well known dynamnic is the proverbial 'wall of worry:' as long as investors continue to be worried and cautious, it is less likely that they have positioned themselves as 'all in.' Metaphorically, the fire burns brighest after the last logs have been tossed in--yet also begins to die down soon thereafter due to lack of new fuel.

So where does that leave us now? Well, invested but worried. It may not be raining yet, but we'll leave the house with a sturdy umbrella every day in any case. Carrying the umbrella--and being willing to unfurl it at the first sign of rain--is probably the best course.

For those who are fearful: you are right to be so. The time to act will come soon. Just not this week. In fact, we may more likely see a final euphoric blowwoff before the next big decline.

In any case, I am totally agnostic on the whole matter and will let the market do the talking.