Rehabbing Your Investment Portfolio

Rehabbing Your Investment Portfolio

Ep 04. Rehabbing Your Portfolio The Retirement Rabbit Hole

Rehabbing an Injury from Training

If you experience injury from exercising, a structured rehabilitation process may be recommended to help facilitate your return to training. The rehab process will include gradual exposure to movements and increasing loads to allow for proper recovery and to rebuild the individual’s self-confidence.

It is not uncommon for someone to be hesitant to resume training due to the fear of reinjuring themselves. While there is always a risk of injury when training there are also health risks from ceasing training that can gradually manifest if exercise is not resumed. 

How to Rehab Your Investment Portfolio

If you were invested in the stock market and sold out of a portion, or all, of your investment portfolio and went to cash the idea of reinvesting can seem daunting. Like getting injured while training, the idea of skipping the rehabilitation process and avoiding training can feel more comfortable in the short-term but can carry long-term consequences.  

Cash is Comfortable

Someone who holds an excessively large proportion of their portfolio in cash is similar to someone who lives a sedentary lifestyle. The potential negative consequences of not putting your cash to work do not manifest themselves until many years down the road when inflation has gradually eroded the purchasing power of that cash.

Investing a portion of your portfolio in stocks does carry market risks but the potential risks may be necessary to fund your future goals. Stocks provide the potential of growth above the rate of inflation and can help you maintain the purchasing power of your portfolio over time. 

How to Rehab Your Portfolio

I have provided a “Portfolio Rehab” process to resume stock investing for someone who has been “injured” by the market. This is not specific investment advice, but rather a framework to be applied regardless of your investing preferences and goals. 

Start with Why  

  • What is your purpose for investing?
  • Is your current portfolio allocated in a manner to allow you to achieve your set purpose?
  • If no, further consideration is needed to determine what changes can be made to give you a better chance of achieving your goals. 

Embrace the process  

  • There will be ups and downs along the way, as investment returns are never linear.  

Manage expectations  

  • Understand that market volatility is always a part of the investing process, and investing can be painful, but “hurt” does not always equal “harm.”
  • The goal is to set realistic returns and volatility expectations. 

Return to Investing  

  • Gradually and systematically increase your stock exposure until you reach your target allocation.
  • Using a systematic process that allows you to reinvest over time helps to remove the emotion from the investing decisions. 

Seek professional help   

  • If you are struggling with the idea of investing, having difficulty finding an entry point into the investing process, or have tried to proceed through this process without success, it is reasonable to seek out assistance from a trusted advisor.
  • This may involve someone local to you, or the team at Western Reserve Capital Management is happy to help. 

The thought of investing in the stock market can seem intimidating but following a systematic process to begin or resume investing in the stock market can be a useful way to increase your equity exposure over time.

The stock market exposes you to additional risks but when these risks are managed appropriately, it can provide you a greater chance of funding your long-term goals.  


Feel free to email us at info@westernreservecm.com with any questions you have.


Gage Paul, CFP®, RICP®, EA
Gage Paul, CFP®, RICP®, EA

Gage Paul is an investment advisor at Western Reserve Capital Management. He works with the firm’s clients to create sustainable financial plans and investment strategies.