Welcome Back,
Hi there
Good morning! In today’s issue, we’ll dig into the all of the latest moves and highlight what they mean for you right now. Along the way, you’ll find insights you can put to work immediately
Investing Snapshot
1. 🌍 Why This Matters
• Rising volatility & declining breadth: More stocks are falling than rising, and defensive sectors are starting to outperform — a classic early warning signal.
• Consumer and corporate spending are cooling: Earnings revisions are leaning negative, increasing recession odds.
• Safer assets are gaining traction: Gold, utilities, energy, and bonds have shown resilience while growth names slip.
2. 🧠 The Strategy: Recession-Proofing Through Smart Rebalancing
This week’s strategy is a practical 4-part framework you can apply immediately to prepare for choppier markets without panicking.
Step 1 — Shift 5–15% Toward Defensive Sectors
Think:
Healthcare
Utilities
Consumer Staples
These sectors historically fall less and recover faster during downturns.
Step 2 — Increase Exposure to “Cash-Flow Assets”
These protect your downside by paying you even if markets slide:
Dividend stocks
REITs with strong occupancy
Short-term bonds or T-bills
High-yield savings or CDs (today’s rates are still very appealing)
Step 3 — Trim Concentrated Growth Risk
If you’re overly exposed to:
High-multiple tech
Unprofitable growth
AI-adjacent speculative names
…this is a good time to reduce position size, not necessarily exit entirely.
Step 4 — Keep a 5–10% Cash Cushion Ready
Cash is not “dead money.”
In volatile markets, cash is opportunity.
Downturns create the best buying windows of your lifetime — but only if you’re ready.
3. ⚖️ Risk vs. Reward
Pros
Reduces emotional decision-making during corrections
More stable returns in uncertain periods
Provides buying power for future market dips
Helps maintain long-term compounding without major drawdowns
Cons
Defensive positioning may underperform in sudden rallies
Holding cash can feel “unproductive” during strong uptrends
Requires discipline to rebalance consistently
4. 🚀 How to Take Action
BEGINNER INVESTORS
• Rebalance your portfolio quarterly using a simple split:
50% diversified stock ETF, 20% bonds, 20% defensive sectors, 10% cash.
• Set up automatic contributions so you continue buying even during volatility.
INTERMEDIATE INVESTORS
• Evaluate your sector weights — bring tech exposure down if it exceeds 35–40%.
• Add dividend ETFs or strong cash-flow companies (top-tier utilities, large consumer staples, energy leaders).
• Consider 3–6 month T-Bills for stable yield.
ADVANCED INVESTORS
• Rotate strategically into value and low-volatility factors.
• Use options for hedging (protective puts, collars, or covered calls).
• Build a “buy-the-dip watchlist” of high-quality companies you want to accumulate when volatility spikes.
• Reallocate toward commodities (gold, energy, industrial metals) to balance equity risk.
That’s All For Today
I hope you enjoyed today’s issue of The Wealth Wagon. If you have any questions regarding today’s issue or future issues feel free to reply to this email and we will get back to you as soon as possible. Come back tomorrow for another great post. I hope to see you. 🤙
— Ryan Rincon, CEO and Founder at The Wealth Wagon Inc.
Disclaimer: This newsletter is for informational and educational purposes only and reflects the opinions of its editors and contributors. The content provided, including but not limited to real estate tips, stock market insights, business marketing strategies, and startup advice, is shared for general guidance and does not constitute financial, investment, real estate, legal, or business advice. We do not guarantee the accuracy, completeness, or reliability of any information provided. Past performance is not indicative of future results. All investment, real estate, and business decisions involve inherent risks, and readers are encouraged to perform their own due diligence and consult with qualified professionals before taking any action. This newsletter does not establish a fiduciary, advisory, or professional relationship between the publishers and readers.
