As some of you may have noticed, I have taken a 3-week hiatus from my “weekly” blog posts. During this time, equity markets crept higher while bonds largely marked time. But on Friday, August 22, stocks rallied strongly to yet another all-time high after dovish comments from Fed Chair Powell hinting at a potential September rate cut.
So, what should investors do with this information? After two years of +20% U.S. equity market returns, can this pace continue? Is it time to go all-in or, as you might guess, stay the course?
This conundrum is especially difficult for those with new found wealth either from the sale of a business, a legal settlement, employment stock participation, or an inheritance. This sudden “liquidity event” presents a unique challenge: how to plan and invest wisely when it feels like you’ve already missed the runup.
Pause Before You Act
First things first - don’t confuse urgency with opportunity. A major liquidity event is emotionally and financially complex. The temptation is to do something—put the money to work, make long-deferred purchases, respond to family requests.
Instead, consider doing almost nothing at first. Park the funds in short-term, stable instruments. Give yourself the space to reflect on what this money means to you and what it’s for.
Markets at Highs—Should You Wait to Invest?
This is a common question. When markets are at all-time highs, it’s natural to worry about buying in at the top. But long-term planning doesn’t hinge on perfect timing—it hinges on purpose, structure, and discipline.
Dollar-cost averaging can be a valuable tool here. Rather than trying to call a market top or bottom, you gradually put your money to work over a defined period. It's a strategy that balances participation with prudence.
Build a Plan Before Building a Portfolio
Liquidity is powerful, but aimless money often evaporates. Use this time to:
Clarify your goals—retirement, gifting, education, philanthropy.
Understand your risk tolerance (which may change post-event).
Coordinate with professionals—a financial planner, tax advisor, and estate attorney.
When you connect wealth with purpose, investment decisions become much clearer.
Avoid the Usual Pitfalls
Big cash events tend to bring out behavioral biases:
FOMO (fear of missing out)—especially in a rising market
Lifestyle inflation—easy to justify in boom times
Family friction—requests often come faster than plans
Stay grounded. Structure beats spontaneity when it comes to financial longevity.
At Dattilio & Ash, we partner with clients to navigate these pivotal moments. With Tony Ash, CFA providing investment expertise and Dave Dattilio, CPA delivering tax insight, we work together to craft solutions tailored to your situation.
And while today’s headlines celebrate new market highs, true financial success comes from discipline, purpose, and perspective. A liquidity event is both an opportunity and a responsibility—and with the right plan, it can become the foundation for security, generosity, and peace of mind.