The market is hovering near all-time highs.

Economic data is getting murkier.

Pundits are once again warning that trouble is ahead.

Which means a familiar question starts to surface:

It’s a completely reasonable question, and one that I'm addressing in today's email.

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Before we dive in, did you catch this week's podcast? 👇

The Retirement Income Mistake That Costs Investors 6% Per Year In this episode: new research on dividend investing, why this popular income strategy underperforms, and what the evidence says about building a portfolio that truly supports long-term retirement success. 🎙️ Listen now on ​Apple​, ​Spotify​, or ​YouTube​.

Taking Some Chips Off the Table

Over the past three years, the U.S. stock market has returned +26%, +25%, and +18%.

Over the last decade, it’s averaged more than 15% per year.

And last year, international and emerging markets joined the rally in a big way, returning +31% and +34%.

The result?

For those who stayed the course, portfolio balances are higher than ever before.

But as balances rise, so does the instinct to protect them.

The urge to “lock in” gains before something takes them away starts to feel sensible, or even responsible.

That reaction is completely natural. It’s also a bit ironic.

Because portfolios didn’t grow to these levels by avoiding uncertainty.

They grew because we stayed invested—through scary headlines, recessions, rate hikes, elections, pandemics, and no shortage of confident forecasts predicting lower returns.

So let’s come back to the question:

When phrased this way, the question usually carries a hidden assumption—that markets are likely to fall soon and we should act before they do.

In other words, shouldn’t we trim equities now and sidestep the next downturn?

Irreducible Uncertainty

History gives us a humbling answer. For more than a decade, “market experts” have warned of muted or disappointing returns.

And yet, during that same stretch, markets delivered above-average performance.

That doesn’t mean declines won’t happen. It simply reminds us that forecasting short-term market moves is extraordinarily difficult.

My good friend Carl Richards calls this reality “irreducible uncertainty.”

No matter how much research we do, how many charts we analyze, or how closely we follow the headlines, there is always a baseline level of not-knowing in life and in markets.

That uncertainty can’t be eliminated. It can only be managed.

Which leads to a better question:

That subtle shift moves us away from prediction and back toward planning.

To answer it, we need to ask two far more important questions:

1. Have your goals changed?
2. Do you have enough cash and short-term bonds (your “war chest) to fund the next 2–3 years of spending?

Those are the questions that matter.

If your goals haven’t changed, and your portfolio is still aligned with them, then current market levels alone don’t automatically justify a shift.

And if you already have sufficient low-volatility assets set aside to cover the next few years of spending, you’re in a strong position.

The exact amount will vary by situation.

But when that short-term bucket is funded, your long-term investments can continue doing what they’re designed to do:

Grow to support the years beyond that.

Of course, if your goals, spending plans, or risk tolerance have changed, that’s a different conversation (and one worth having).

But if nothing meaningful has changed in your life, adjusting a long-term portfolio simply because markets feel “high” risks turning a disciplined plan into a reaction.

Retirement plans shouldn’t be driven by headlines or short-term forecasts.

They should be grounded in your purpose, your time horizon, your income needs, and the lessons history continues to teach us about uncertainty, patience, and staying invested.

Bottom Line

Taking chips off the table makes sense when your life requires it.

Doing so because we’re afraid of what might happen next is something entirely different.

As Peter Lynch once said in one of my all-time favorite quotes:

At its core, that’s the trap we’re working to avoid.

📚 What I've Been Reading

• US Stocks Are 40% More Expensive Than International Stocks (Apollo Academy)​
• Economic Data Can Often Be Both ‘Worse’ and ‘Good’ (Sam Ro)​
• Stop Me Before I Open Another Account! (Center for Retirement Research)
• How to Transfer Real Estate to Family (CNBC)
• Are Waymos Safer Than Human Drivers? (The Argument)​
• The Insidious Effects of Hurrying (Harvard Business Review)​

Thank you for reading!

Please reply to this email with comments, questions, and/or feedback.

Stay wealthy,

Taylor Schulte, CFP®