On this week’s show, we examine the news surrounding the government shut down and what it means for investors as well as their portfolios.

As both sides of the aisle in Congress continue to stare each other down investors may wonder what they should be doing here. We’ll take a look at what we’re doing as a firm and give you a peek under the hood of investment management.

Taking Gains

What does it mean to take some gains in the market here? Find out why we’re rotating out of some profitable investments and raising a little cash in our equity allocation.

Two Concerns

When looking at the market here there are two things that stand-out. First, the complacency taking over investors as the market continues its march higher. The second, is the lack of a reasonable and healthy correction in over a year. Combine these two concerns and you have the potential for investors to be shocked the next time a healthy rotation or correction bubbles up.

Flexibility Is Key

In investing as in sports flexibility and being nimble are key. There are times when your strategy needs to adjust and respond to the realities as they present themselves. Unless you’re a completely passive investor, who is willing to accept the natural cycles inherent in investing in the markets, there will be times when it’s appropriate to raise some cash with a goal of investing it in new opportunities as they present themselves. Being flexible is key, few investments are standouts forever and a willingness to be nimble may just help you see a potential new investment with much greater clarity.

What to do here?

So what should individual investors be doing here as the market complacently marches higher while Washington displays a lack of willingness to cross things off their task list? Here are three key things you may consider adding to your “to do” list:

  1. Get your financial life in order. Pay-off the debt you’ve been thinking about getting rid off. Stop putting off completing your financial plan. Understand your required rate of return and what that means to you and your investments.
  2. Check your allocation. Stocks have had a great run lately. But, that might mean your portfolio is much more exposed to stocks than you mean to be. Unless you’re in a plan that rebalances automatically, it may be time to review your portfolio and make sure your allocation matches your goals and temperament.
  3. Think about reducing market exposure if prudent. If you’re following a strategic approach it may be time to review your cash levels and think about raising more for future opportunities.