Right Now, Is Managing Equity Exposure More Important Than Equity Diversification? James R. Wigen, CAM® ChFM® CPM® CWM®, Sr. Portfolio Manager & Sr. Wealth Manager

The First Quarter has come to a close in 2023.  What do we know so far?

Technology stocks such as Draftkings, Twilio, Microsoft, Meta (Facebook), and Nvidia are up around 80% in 2023.  Have you missed the upside?  Yes, for now!

Don’t let the rise of Technology Stocks fool you, earnings start in April and this market will decline across most asset classes.  Lock in some gains, move money you have in Savings & Checking accounts to your Brokerage Account, if you can, and sit in the Non Sweep Account Money Market Fund that is offered (currently yielding around 4.5%).

By keeping money liquid, and receiving a very attractive yield on that money, we can let the market come back to us.  This is how markets will work for several months now, down on earnings & forward looking statements, and slow recovery between earnings seasons.

The market at this time, is not going to run away from you to the upside, not yet anyway.  When markets decline, take some money from the Money Market Fund and move into high quality stocks that will offer nice growth in the coming years.  You, nor I, will ever time it perfect, therefore, stick to Dollar Cost Averaging.  I know you have heard that a million times, however, during these challenging times, it is the best option you have if you are interested in equities.

Email me if you need a second opinion from your Financial Salesperson, as a Chartered Portfolio Manager, I can help build a Custom Portfolio For You & Manage the Portfolio through these difficult times.

For the next several months, Diversification in Equities will NOT be as important as Exposure to the Equity Market.  Some periods will indicate you should increase exposure to equities, and other times, like before earnings seasons, reducing exposure to equities will help you reduce portfolio risk.  Trading like this is ideal for Tax-Deferred or Tax-Free investment accounts.

You will never Sell right before the market drops or Buy right before it rises, so no need to try.  Trim profits a couple weeks before earnings start, and be ready to start Dollar Cost Averaging when the market drops.  When companies announce favorable news for the coming quarters, that is a sign to start increasing exposure to equities.

As we have seen in the past, January 2007 most recently, the Fed Funds Rate was above 5%, the Fed Cut rates twice in 2007, stock market continued rising until October 2007, then it all collapsed.  By December 2007, we were in a Recession. 

What we are going through right now is nothing new, the details which got us to this point are different, however, in my 27 year career, this is the third cycle like this I have been involved with, and the details within the cycles are very similar.

What did I learn previously? I was really good at getting out early, not so good at getting back in early.  I have learned to stay very liquid with Cash, and during strong market declines, keep buying VERY small amounts of shares from companies I like, and are appropriate for my clients.

I am here to help you anyway I can!


James CPM® designation was earned through Global Academy of Finance and Management or GAFM®

Investing involves serious risks and past performance is no guarantee of future performance or success.  This is not an offer to buy or sell securities and nothing contained herein should be interpreted as a recommendation regarding any investment or investment strategy.  Before making any decision to invest, first read the relevant disclosures and important information provided to you.

Please take the proper risk for your current situation and get the advice from a financial professional who clearly understands your current & future goals and objectives.


All opinions expressed by James R. Wigen on this website are solely his opinions and do not reflect the opinions of IFP Advisors, LLC, dba Independent Financial Partners, (IFP).  Investment Advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Adviser. IFP and Independent Financial Management, LLC (IFM), are separate entities.



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