Click here to get a FREE copy of Eric’s Book ‘How To Scale or Sell Your Closely-Held Business’
Click here to get a FREE copy of Eric’s Book ‘How To Scale or Sell Your Closely-Held Business’
A large share of the market’s strength since 2023 comes down to one thing: the buildout of AI infrastructure. Big Tech is spending at a scale we haven’t really seen before with new data centers, custom chips, enough power to run it all, and they’re betting the returns eventually justify it. That bet has become such a big part of the market’s earnings growth that the index’s fortunes are now tied to it, whether investors realize it or not.
Here’s what I’ve seen in every real correction I’ve worked through: the drop itself is rarely what does the damage. What does the damage is what people do next. Someone sees their account down 15%, panics, and sells into it, locking in the loss and missing the recovery that, historically, always follows.
The investors who come through a pullback fine aren’t the ones who predicted it correctly. They’re the ones who had already decided, before it happened, exactly what they would and wouldn’t do when it did. That’s the part most people are missing right now. Not a prediction. A plan we can help you build.
Not everything in the market moves together in a pullback. Consumer defensive stocks, the companies selling things people buy no matter what (groceries, utilities, household basics), tend to hold up better when spending tightens. Consumer cyclical stocks, tied to discretionary spending like travel, retail, and big-ticket purchases, tend to feel it first and hardest.
Sector positioning is one of several levers we use with clients heading into a stretch like this. It’s not the whole strategy, but it’s a real example of what defense actually looks like, beyond just holding on and hoping.
I don’t build plans around predicting the next correction. I build them so a correction doesn’t force a decision under pressure. That means knowing, before it happens, whether you’re overweight in a handful of AI-driven positions, whether you’ve got enough set aside that a pullback doesn’t force a sale, and having your own defensive moves mapped out with us instead of figuring them out in the moment.
If you want to talk through what this means for your own plan, reach out to us today.
The information provided in this blog is for general informational and educational purposes only and is not intended to constitute, and should not be relied upon as, financial, accounting, tax, or legal advice. Cash flow forecasting and financial planning involve inherit risks and uncertainties, and results may vary significantly based on a variety of factors. By reading this blog, you acknowledge and agree to this disclaimer.
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