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What To Do When the Market is Up

Regardless of whether you are an avid reader of Market Watch or just tune in to the nightly news every now and then, you know that 2017 was a banner year for stocks. In fact, both the Dow Jones and the S&P 500 celebrated the launch of 2018 by reaching record highs1 and until the beginning of February 2018, we were experiencing the second-longest bull market since 1929. 


Even though we have recently experienced some corrections, the markets are still up considerably from where they were even at the end of 2016. There have been headlines aplenty all focused on the same thing: the imminent market downturn. But despite all the dire predictions, the market doesn’t seem to care what everyone thinks. So store up that advice for the future and focus on what you should be doing right now. What steps might you want to take when the market is up?

Rebalance Your Portfolio

With the markets performing as they have been lately, chances are your asset allocation has gotten a little off. The high returns that parts of your portfolio are generating are shifting your portfolio off balance, with some investments growing much faster than others.


Though it may seem counterintuitive to sell off your winners, rebalancing is generally a wise investment strategy. You may need to rebalance your portfolio by selling some of your overachievers to purchase underperformers. This will keep your portfolio from having more risk than you are comfortable with. What was once only 10% of your portfolio can easily grow to 20% or 30% in a bull market like this. Readjustments may be necessary.

Don’t Get Greedy

Fight the human tendency toward greed. As we’ve already mentioned, high returns can be enticing. Rushing after them, though, can lead you to a dangerous place!


Make a conscious effort to avoid the hype and stick to your investment plan and corresponding asset allocation. Remember the risk tolerance level that you established for yourself. If you’re unsure how much risk you are prepared to take, sit down with your advisor to determine your unique risk level.


Don’t let record highs tempt you into making poor decisions. Remember, the investments that shoot up are usually the ones that drop the lowest when the markets do take a turn for the worse. By avoiding greed and rebalancing your portfolio, you will likely put yourself in the best position in the case of a market downturn.

Be Prepared For A Correction

The pundits are right that the markets will correct themselves. The problem is that we never know when or by how much. It’s important to recognize the reality of market cycles and prepare for the inevitable downturn.


Your portfolio isn’t the only thing you need to prepare for a bear market, though. You need to prepare yourself mentally. When the market goes up for as long as it has, it’s easy to start taking it for granted and expect it to continue. Many people are caught off guard during market corrections and let fear and anxiety take over.


Don’t let your emotions get the best of you. As long as you are following sound investment principles, only investing long-term money, and keeping your assets within your risk tolerance, you should have no reason to panic. Yes, things may drop momentarily, but you can keep worry at bay knowing that you are in it for the long haul.

How I Can Help

If you’re not feeling confident, maybe you could use a portfolio review. I can help you create clear financial strategies and set a firm foundation so that the ups and downs of the market roller coaster don’t keep you up at night. At Montag Private Wealth, we create comprehensive, customized portfolios that concentrate on risk determination and an individualized asset allocation process to capture the expected risk and corresponding return level, regardless of what the market is doing. Book an appointment now and take advantage of the market cycle.

About Carl

Carl Martel is the president and portfolio manager of Montag Private Wealth. Along with more than 15 years of capital market experience and 10 years of experience in real estate hard assets, he is a Chartered Investment Manager® and holds a Certificate in Derivatives Market Strategies from CSI Global Education, a Masters of Science from Laval University, and an MBA from l’Université du Québec à Montréal. A focused and pragmatic, results-oriented investment professional and entrepreneur, he specializes in serving the unique financial needs of high net-worth individuals and families, foundations and endowment funds, and business owners. To learn more, visit or connect with Carl on LinkedIn.