Overbought Conditions | Wisdom, Wealth, and Wellness

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®, CDFA®, DACFP

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management. On today’s episode of “Wisdom, Wealth, and Wellness,” I’m taking my dog for a little walk, getting a little fresh air, clearing my head. Thinking time. And I like to share during my thinking time.

Sometimes the markets are oversold. Sometimes the markets are overbought. There’s different language that you may hear. That language has an impact on some people, but it doesn’t have to have an impact on you. So let’s just use this example. Markets are in overbought conditions. I might agree with that. Does it necessitate I make a change or do something different?

I might own a portfolio of assets that have millions of dollars of gains. Well, if conditions are overbought, and I sold those positions because I was worried about prices declining a little bit, I would guarantee that I would be subjecting myself to a tax obligation. That tax obligation could be somewhere between $150 and $500,000 guaranteed tax. So then the question is, are the overbought conditions so stressful that I think I’m going to lose that $150 to $500,000 anyway? And what’s my replacement cost of doing something with the money and retiming the reentry of repurchasing those businesses or positions that I might own, and, on top of that, it’s the mental angst of is that how I want to live day in and day out, week in and week out, trading week to week, month to month, based on the whims of the world? Or do I want to design a portfolio that can weather all seasons and support the creativity, the dreams, and lifestyle that people want to achieve for multiple generations? And chill. I like the chill factor, but teach their own on their path to Wisdom, Wealth, and Wellness.

Have a great day.

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Video Recorded December 7. 2023
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Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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