Macro Minute: Week of December 15, 2025
I am part of a study group with fellow advisors. One of our latest discussions centered around the amount of debt in the system and what happens when liquidity goes away. The concern is like when Warren Buffet said, “Only when the tide goes out do you discover who’s been swimming naked.” I am very sympathetic to this fear, but should that fear dictate your investment decisions now? I think not and let me describe my way of thinking through not only this concern, but others that arise.
On a broad scale, we must remember our time frames. If we are beginning our investment journey, down markets are a great time to buy assets. If we are toward the end of our investment journey, we should be holding investments that either are safer or enough cash to cover our expenses. We must also be a student of market history and understand that, in general, markets go up most of the time even though there are legitimate concerns. To be a good investor is to master one’s own fear and greed. We cannot let our emotions, and our logic at times, take us into either too much or too little exposure. Trying to reliably time market movements is incredibly difficult.
Given that markets are always full of fright and passion, how should one navigate them? I lean toward relying on diversification and risk tolerance to be my north star. Staying invested through uncertainties is easier when you know that you are invested in holdings that have exposure to a wide range of outcomes. Not only that but knowing that you have neither too much nor too little risk compared to where you are most comfortable should bring peace of mind.
Life is full of uncertainty. We cannot let that uncertainty dictate our ability to plan for our future. Most people look back and wish they had taken more adventure and not let fear be their guide. I say plan your path, invest accordingly, and don’t let fear or greed distract you from your end goal.
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