Over long periods of time, markets and headlines tend to move together. Fearful news often leads to falling markets, while optimism usually means rising prices. But every so often, we experience seasons of divergence.
We find ourselves in one of those seasons again.
Markets are sitting at all-time highs, while the tone of daily news and social media feels unsettled—marked by social tension, geopolitical uncertainty, and a steady drumbeat of alarming headlines. It’s natural to ask: How can Wall Street be rising when things feel so uneasy on Main Street?
This is exactly the question we were asking five years ago when COVID and protests dominated the news while the stock market was hitting new highs.
At the time, we pointed out that markets are not a scorecard of today’s headlines. They reflect expectations about the future, not the emotional intensity of the present moment. We noted that news and social media often magnify extremes, while markets quietly price probabilities. The takeaway then—as now—was that emotional reactions are rarely rewarded, but patient, disciplined investors tend to be.
So how can we be patient and disciplined investors? By not being overly aggressive.
Overly Aggressive
11 years ago the Seahawks were overly aggressive. They were in the Super Bowl playing the Patriots and needed a touchdown to win. Did they play it safe and hand the ball to a running back nicknamed “Beast Mode?” Unfortunately no, they were overly aggressive, threw a pass (picture), and it ended in tragedy. The Patriots intercepted the ball and the Seahawks lost. My heart was broken!
Wouldn’t you know it, but guess who played in the Super Bowl again last week? Seahawks and Patriots. Fortunately, the Seahawks did not make the same mistake!
That said, when stocks have rallied multiple years in a row, when returns in accounts are above average, and everyone is optimistic (financially), we DO NOT want to be overly aggressive. It’s now time to be patient and disciplined.
The last three years have been great. The returns from the S&P 500 according to Morningstar were: 26% in 2023, 25% in 2024, and 18% in 2025.
A three-peat of double digit growth is rare. It doesn’t mean it can’t continue but a four-peat is even rarer–only happening twice in the last 75 years.
We should be cautious moving forward.
Patient
When we get a new account, or have new money to invest, we don’t typically invest it all at once, especially when the market is at all time highs. We only invest 1/3 to 1/2 at the start, then we wait (sometimes six months) for a meaningful pullback to invest the rest. In other words, we’re being patient investors, not overly aggressive.
Our list is growing of clients that have large cash positions to invest in stocks. We are being patient and waiting for a good opportunity. The last opportunity we took advantage of was April, 2025 during the “tariff tantrum” when stocks dropped 20%.
Disciplined
For everyone else that’s already invested, you’re winning the game! You have had several years of above average growth and hopefully feeling good about your balances. No reason to get overly aggressive and start throwing Hail Marys!
It’s time now to be disciplined in our allocations, diversification, and spending. Here’s how we’re doing that:
Cash – How much should we have in cash?
Cash is low risk money in the accounts that’s typically invested in money market funds. When we’re hitting new highs, like we are now, we want a lot in cash. When markets drop, we want to use that cash to invest in companies and funds that have gone down and have a potential to rebound.
Cash positions are as high as 20% in our Growth Stock Portfolio right now. That gives us the ability to buy some good stocks at lower valuations when the market drops.
Bonds – How much should we have in bonds?
Bonds keep the portfolio balanced. We reduced exposure to bonds when interest rates were low, like they were in 2008-2022. Now that rates look to have peaked, we are looking to raise the allocation to bonds once again. This also help us from being overly aggressive.
Stocks – How much should be in equities/stocks?
Stocks help the accounts keep up when markets are doing well. We want to reduce our stock exposure at the top of the market, and then add to our stock allocation when markets drop—like we did in April last year.
We have ~80% in stocks in our Growth Stock Portfolio and ~60% stocks in our less aggressive Moderate Funds Portfolio. We’ll look to trim/sell stocks for those who have more than those percentages when we rebalance in the coming months.
Diversification – How much is in tech?
We are always assessing how much is invested in each sector. An example is Technology. The last few years it has benefited our clients to have a large allocation to Technology. Moving forward, we feel like it would be overly aggressive to continue this. We plan to reduce our exposure to the allocation in tech and reallocate to other sectors like industrials, utilities, financials and others. This started last year, but we have more we’d still like to do.
Spending – How much should we be taking out of the accounts?
For those in retirement already, we’re always weighing in on how much our clients should be taking out of their accounts to live on. To be overly aggressive in spending, is to think we will always benefit from the outsized returns we’ve had the last three years, and to spend accordingly.
We encourage our clients to pay close attention to the level of spending in relation to their balance. We look to caution people from withdrawing more than 4-6% of their balance each year depending on their life expectancy. Typically the younger people are, the closer they should be to 4%, and as they get older can grow the distributions closer to 6% per year of the balance.
Please review your enclosed statement and let us know if you have any questions about any of this.
SMB Financial News
We grew yet again this last year! We now manage ~$195 Million across our five advisors. With that growth comes additional work we need help with. We are once again looking to hire and have found a gem in our current intern.
Thomas Ewing is a veteran who served our country in the Marine Corp before heading to George Fox several years ago to study Financial Planning. He and his fiancé Juli are planning to get married this May!
Since October, Tom has been in the office Monday, Wednesday and Friday, and we’re hoping that grows to full-time once he’s done with school. He’s already been a big help in the office screening all the sales calls! Please introduce yourself when you call so he can get to know the greatest clients on earth!
Thanks for reading,
Tim Porter, CFP®