Markets have been flying high, with a two-year run from the end of 2023 to November 2025 (as of writing). Stocks and markets have been crashing through record highs seemingly constantly, and bond prices have been steadily rising as interest rates have been cut and are anticipated to be reduced further in the future. Markets like these are what most people’s wealth gets built on. These optimistic, “bull” markets are the bedrock of an investment portfolio, the foundation on which everything else is fashioned. But what happens when this optimism runs out? How should one structure their investments to be able to take advantage of these incredible bull markets while also protecting against the eventual back steps that we all know are coming at an unknown time in the future?

                Eventually, these strong markets get too greedy and overstep an invisible boundary. High valuations ultimately need justification, and investors may rationalize their investments, and sell their investments that are overvalued and en masse, potentially causing the entire market to take a step backwards. If one’s retirement portfolio is built on the concept, investments always go up, it can be tricky to maintain a withdrawal schedule. The resulting stress can cause an investor to make poor decisions in the heat of the moment, and they end up missing future opportunities when markets are once again moving in a positive direction, due to fear of potential ruin.

                The best way that we know of how to avoid this cycle from fear to greed, is to avoid timing the market altogether. Instead of building a portfolio that is attempting to pick investments that go up and avoid investments that will go down, we strive to construct a portfolio that generates an ongoing consistent income stream, it will continue rolling into the accounts regardless of whether markets are up or down in a given period. This makes it incredibly easy to have an ongoing withdrawal flowing from the investments to support one’s retirement lifestyle.

                It is a common misconception that investing for income means not participating in the upswings of the market, this could not be further from the truth. The very fact that a consistent income stream is flowing into the account means that an investor is not forced to sell any of their investments to fund their lifestyle, as such, the shares they own continue to appreciate in value all while spinning off dividends and other distributions in cash into the account. As a bonus, if there is surplus cash then what is needed to fund their retirement lifestyle, the remainder is available to be re- invested causing the portfolio to grow even more.

                Not only does this income stream make for simple cash flow management, but it allows an investor to avoid the greed and fear cycle. The income spinning off the investments provides for the cash needs, and the investments can be left to ebb and flow with the markets overtime. As a result, the investor gets to partake in the booms as markets are climbing and feel assured in times of market negativity that they do not have to panic and sell. The income will keep rolling through market downturns and the portfolio will recover intact.

This freedom to avoid the anxieties of future booms and busts allows an investor to avoid the rollercoaster ride of watching the markets and instead focus on what matters more in life such as family, friends, hobbies, and interests. You spent a career working and building your wealth, and retirement should be the time to reap the rewards without continued worry or micromanagement.

We offer our clients a portfolio that allows them to do just that. Focus on what is most important to them, take emotional decision making off the table, and avoid the guess work of a speculative portfolio. If an investment portfolio like this is of interest to you, reach out at 403-260-0568 or contact us via our website: www.kozakfinancialgroup.ca