Cash is King


Monday will mark the 10th anniversary since the peak of our last bull market. To be exact, October 9th, 2007 the S&P 500 (the 500 largest stocks in the US) sat at 1565.  In the following months, we watched one of the swiftest declines our markets have ever experienced, with a bottoming out on March 9th, 2009.  That same S&P 500 then sat at 667, an unprecedented 57% loss over a seventeen-month period.

In our vague memories, most of us still remember a pain point or two that came from this difficult time now coined the Great Recession.  I jokingly share with my clients that prior to the Great Recession I had a wonderful full head of hair, which by all accounts now appears to resemble a bowling ball with some scruff on the sides.  The point is, the period was painful and certainly instilled some stress on all of us.

During the past 10 years, we’ve heard the effects this market downturn had on individuals and their families. Stories of delayed retirement, businesses lost and marriages broken, as they watched their hard-earned nest egg slowly vanish were, unfortunately, too common. With the “great recession” still fresh in our memories, clients and individuals have begun to ask, “what if a market downturn happens again?”

For Vantage Wealth Planning, it’s not a matter of if but rather when.  Since that March 9th, 2009 market low, we have watched the S&P 500 grow by 272% and many industry experts suggest our market is expensive.  Yet, we heard the same thing a year ago and the market only continued to climb.  Like everyone else, we don’t know for certain when the next down turn will come, but we do know how to ensure our clients will have the cash available to continue living their current lifestyle while allowing their portfolio remains invested and is able to rebound from the downturn.

Imagine March 9th, 2009 sitting with enough cash to ensure your lifestyle would be taken care of for the next year and a half and having a strategic cash bucket to buy some of those investments that were being sold for pennies on the dollar.

Focusing on you and your cash needs is one element of the planning process at Vantage Wealth Planning.  Although this sounds easy and commonsense, very few advisors put enough focus on cash planning to ensure it works when the wheels come off the bus of our markets.  Our disciplined approach provides you with peace of mind around weathering any storm as well as giving you the ability to spend even when your portfolio goes down in value.

So, do you know where your retirement paycheck will come from and how to design your portfolio to weather the storm?


Benson Mathews