Friday at the Mic - Goldilocks Had It Just Right. Then the Bears Came Home.
By Jeff Bingham, President
You know the story. Goldilocks finds the porridge that's not too hot, not too cold, just right. That's what most of us are after when we set up a portfolio. Not so much risk we can't sleep, not so little that we fall behind. A mix that's just right for us.
Here's what nobody tells you. Just right doesn't stay just right on its own.
Stocks have had one strong year after another, and they're still running. Bonds haven't kept pace. So without you touching a thing, the stock side keeps getting bigger and the safe side keeps getting smaller. Even this year alone, with stocks up and bonds down, a mix that started out just right has drifted. Stretch that over 3 good years and what started as roughly 60% stocks can be 75% today.
You never decided to take on more risk. The market decided for you.
And this year it's happening from both ends. Stocks are up. Bonds, the part that's supposed to protect you, are down 3%. So the risky side grows while the safe side shrinks, and your mix drifts away from just right faster than usual.
It's the same in a 401k. Unless you're in a target date fund that rebalances for you, your best performers keep growing and take over the account.
This kind of risk is silent, like inflation. You don't feel it on the way up, because on the way up it feels great. Then the bears come home. A portfolio you thought was just right drops like one that was running hot the whole time. That's not the moment you want to find out. And here's the irony: if you won't rebalance, the bear will do it for you. You just won't like how.
The fix is simple. You rebalance. Sell some of what's done well, buy some of what hasn't, and get back to just right. Simple to say. Hard to do, because nobody wants to sell a winner. And it works the other way too. When markets fall, rebalancing means buying stocks when every instinct says run. Fear and greed are always in the room, and part of my job is managing that along with the money.
Then you look at the players. Is each fund doing the job it was hired to do? If your second baseman isn't hitting, you go find one who fits the team better.
None of it takes a big overhaul. It takes balance and discipline, same as most things in life. Skip and I walk through all of it on this episode of the Four Seasons Podcast. Give it a listen. And if it raises a question about your own portfolio, let's talk.
Keep the Faith. God Bless America.
Jeff
Source: Kwanti, as published in My Views, October 15, 2026. Stocks as measured by the S&P 500, bonds by the Bloomberg U.S. Aggregate Bond Index, year to date. Indexes are unmanaged and cannot be invested in directly. The 60% to 75% drift is a hypothetical illustration. Past performance does not guarantee future results.