2min chapter

Thoughtful Money with Adam Taggart cover image

Overly Bullish Investors Risk Losses Of Up To 50% This Year | Lance Roberts & Adam Taggart

Thoughtful Money with Adam Taggart

CHAPTER

Proactive Portfolio Management Strategies

This chapter emphasizes the significance of proactive portfolio management in adapting to changing market conditions. It outlines a strategy of gradually reducing equity risk during times of market exuberance to safeguard against potential losses.

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markets were extremely extended, very overbought, super exuberant. There was no risk on the horizon. And we were like this. And I wrote an article called This Is Nuts. I said, when you start your portfolio management meeting with This Is Nuts, it's probably time to start taking some action. And so we were reducing portfolios in January. We reduced them in February. And then in early March, just as the pandemic hit, we got the first trigger signal and we started reducing equity risk very rapidly at that point. But we'd already reduced a good bit of risk out of the portfolio before March ever hit. So we didn't have to just violently sell everything during that whole March decline. So that's kind of the process we're in now, which is that proactive part, which sets us up to be reactive, but we don't have to be dramatically reactive because we've already taken some action so we can let the market break a little bit, confirm that we've got an actual break going on, confirm it's not just a little quick sell-off that reverts. But once we start to see those signals all kick in, then we can more safely just start reducing broad chunks of risk across the portfolio. Yeah.

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