Why August Might Be the Most Important Time To Stay the Course
August has always been known as the “Dog Days” of summer—a time of heat, slowdown, and discomfort. Historically, the term refers to the morning rising of Sirius, the Dog Star, which the ancient Romans believed contributed to the oppressive, stagnant weather of late summer. It was a time to rest, stay sheltered, and weather the storm.
In the investing world, it can feel the same. Markets may seem sluggish, while news cycles heat up with speculation, forecasts, and fear. Economic data often arrives like hot air: dense, hard to read, and exhausting. For investors, all of this often comes with a temptation to act, to adjust, to respond. To do something to feel productive or protected.
However, the lessons of the Dog Days run deep, and they are especially meaningful to those of us who approach wealth management with strategy, discipline, and a clear perspective. In this edition of The Family Office Chronicle, we will review what we believe are the most important of those lessons.
When the News Sizzles, the Best Move May Be To Stay Put
We live in a world where news reaches us constantly and instantly. One headline can set off a wave of emotions. If inflation comes in higher than expected, the market tends to dip. If a tech company delays its earnings report, your portfolio might take a hit. And when politics heat up, it can feel like everything becomes uncertain.
August in particular is ripe for what we’d call “emotional noise.” Emotional noise is a powerful concept in behavioral finance and communication. It refers to the internal chatter, reactions, and anxieties that cloud our thinking and disrupt rational decision-making. It’s not data, and it’s not logic. It’s the emotional interference that occurs when we experience uncertainty, fear, or temptation, especially in fast-paced or high-stakes situations, such as investing.
Being triggered by emotional noise is not always about what’s actually happening in the economy. Trading slows down, as many investors are on vacation, and markets can become jumpy, not because anything significant has changed, but because people are distracted and emotions are running high.
When headlines sizzle and the market seems sluggish, it’s easy to wonder if you should do something, anything, to beat the heat. However, smart investors know that this is when you stay cool, stay focused, and let the long game unfold.
Don’t Chase Heat
It’s natural to want to lean into what’s working. In hot markets, that often means piling into sectors that have been leading the charge, whether it’s AI stocks, cryptocurrencies, or high-yield bond funds. But history teaches us again and again: what’s hot today is often overheated tomorrow. Fear of missing out—FOMO—is rarely the investor’s friend.
Chasing performance is one of the most common ways investors fall behind. That’s not just theory, it’s supported by decades of data. According to research from Dalbar, the average equity mutual fund investor has consistently underperformed the market over time, not because they chose bad funds, but because they bought high and sold low. They tried to time the market.
The temptation to chase heat is a reaction to discomfort. When the market feels off, it’s natural to want a win. But jumping into the hottest part of the market is like stepping into the sun with no water and no shade—it may feel right at first, but you’ll likely regret it. Discipline, not heat, builds wealth.
Don’t Abandon Shelter
Your portfolio should not be just a collection of investments. It should be a carefully constructed shelter, built to withstand all seasons—growth and stagnation, heat and cold, calm and chaos. Every element is there for a reason:
- Diversification across sectors and asset classes
- A balance between growth and stability
- Rebalancing to maintain risk alignment
- Tax awareness to enhance after-tax returns
- Flexibility to adapt when it really matters
The point of the shelter is that you don’t have to move every time the weather changes. Abandoning a sound plan because the news is noisy or the market feels boring is like walking out of a perfectly good cabin in the middle of a summer heatwave because someone shouted, “It’s too quiet!”
Market discomfort is temporary. But the wrong reaction, selling low, shifting strategy prematurely, abandoning your long-term allocation, can leave lasting scars.
Don’t Mistake Discomfort for Danger
There’s a profound difference between being uncomfortable and being at risk. The human brain, however, often treats them the same, especially when it comes to money.
If the market’s not moving, if your portfolio feels flat, if the headlines are stressful, it’s easy to assume something must be terribly wrong. But more often than not, discomfort simply reflects the natural rhythm of the markets, not a flaw in your strategy.
Consider this: the market is made of cycles. Some are fast. Some are slow. Some are loud. Some are eerily quiet. A solid plan doesn’t try to predict those cycles. It’s designed to withstand them. Time has a magical way of erasing volatility.
In moments like these, emotional discipline matters more than tactical adjustments. It’s not about making moves, it’s about making sure you don’t make the wrong moves for the wrong reasons.
What August is Good For
You might be wondering: “So what should we do during the Dog Days?” The answer is to stay the course:
- Monitor markets for real changes, not just mood swings
- Rebalance portfolios if asset allocations drift out of range
- Look ahead to year-end tax planning
- Identify opportunities in volatility, quiet or otherwise
- Stay in touch with your evolving goals and risk profile
In short: keep your plan on track. That’s the beauty of a great plan: if you ever need to change something, it will be because your needs changed, not because the weather got hot.
Sirius May Be the Dog Star—But Discipline Is the True North
You’ve probably seen those summer social media posts: “Hot enough for you?” In the markets, we often ask the same question. The truth is, heat doesn’t have to burn you if you know how to manage it.
Sirius, the brightest star in the sky, once signaled danger and discomfort. Today, we understand it’s just a seasonal signpost, something to observe, not fear. The same is true of market volatility, sideways markets, and economic noise. You don’t need a forecast—you need a foundation.
Closing Thought: Stay Cool. Stay the Course.
Just like the heat of August, market discomfort is temporary, but the wrong reaction can set your progress back by years. While headlines heat up, rely on your plan to see you through. That’s the difference between market timing and lifetime planning. That’s what we build plans for—steady progress, through the ups and downs, season after season.
If you’re feeling uncertain, let’s talk. If you’re worried about your plan, let’s review it. If you’re feeling a little lost, we can provide a free report on the state of your portfolio. We call this the Taxes First, Then Math analysis. Enjoy the rest of your summer, stay hydrated, and stay steady. And remember: the Dog Days always pass, but the discipline you build during them can last a lifetime.
