Strategies for an Overvalued Market: Turning Fear Into Opportunity
By Mark Lyman - Book a Demo!
Don’t like reading? Watch the YouTube video!
That Unsettling Feeling
If you’ve been paying attention to financial news lately, you’ve probably noticed a familiar tone creeping back into the headlines: The market feels stretched. Valuations are high. A correction may be around the corner.
For investors, this can feel unsettling. After all, the last thing anyone wants is to put money to work right before prices pull back. Many people respond by hesitating, trying to “wait it out” until markets fall to what feels like a safer level. The problem, of course, is that nobody rings a bell at the top or bottom. Waiting on the sidelines can mean missing months—or years—of compounding growth.
At LymanWealth, we believe fear of a correction is both understandable and misplaced. Why? Because corrections are not only inevitable - they’re useful!
Corrections Are Part of the Plan
Most investment strategies treat market corrections like something to be avoided at all costs. Ours does not. In fact, the Quantelligent strategy is engineered with corrections in mind. Here’s how:
Dollar-Cost Averaging (DCA): Instead of trying to pick the perfect entry point, we invest gradually, day after day. This means that when markets fall, our strategy buys more shares at lower prices - automatically.
Value Averaging (VA): When markets spike up too quickly, we trim the excess. When they fall, we buy more with the excess we just trimmed. This “push and pull” naturally adapts to market conditions without needing to predict them.
Exposure Modulation: Our approach adjusts market exposure during market movements, not to avoid them, but to position the portfolio for an optimized recovery when a drawdown and rebound inevitably occur.
Drawdowns Are Not the Enemy
Let’s be clear: we don’t claim to avoid drawdowns. Nobody can. What makes Quantelligent different is how we use them.
Traditional buy-and-hold investors often suffer through downturns with no mechanism for recovery. Quantelligent on the other hand, is designed to treat corrections as a chance to reposition the portfolio at more favorable prices.
The result? We tend to recover sooner, and the recovery is larger, because we’ve accumulated more when prices were low.
Instead of fearing drawdowns, we turn them into fuel.
A Smarter Way to Face an Overvalued Market
If you’re worried about an overvalued market, you’re not alone. But standing on the sidelines is not the solution. Markets can remain “overvalued” for years before correcting - and the correction, when it comes, can just as easily set the stage for the next leg of growth.
The Quantelligent strategy acknowledges this reality. It doesn’t pretend corrections won’t happen. It prepares for them, works with them, and turns them into opportunity.
That’s the difference between fearing a correction, and being ready to harness it.
