The market has had an incredible run since the April lows, climbing almost in a straight line for months. It’s been one of the strongest and most rewarding stretches for investors in years.

Momentum has been powerful. Many stocks, especially in tech and growth, have risen dramatically. Some of the hottest names have risen 50% or even doubled within weeks, and fortunately, we’ve had a few of those in the portfolio. But there’s been a lot of euphoria recently and that kind of pace is not sustainable.

Markets never move in one direction forever. We haven’t seen a real correction in quite some time, and after such a long advance, a pause or pullback is both normal and healthy.

That time may be near. Even if it doesn’t turn into a major correction, volatility is likely to stay elevated for a while. That usually means large swings in both directions, with strong rallies followed by sharp drops. It’s an exhausting environment that often causes investors to second-guess themselves and make impulsive decisions. It typically indicates underlying nervousness combined with emotional overreaction.

Hence, these are the periods to avoid if possible. Even though I was expecting volatility I didn’t expect this much.

This doesn’t mean it’s time to sell everything or short the market. This bull market is far from over. But it might be wise to take a few chips off the table, lock in some profits, reduce weaker positions, and slightly reduce exposure. This isn’t about perfectly timing the market. That’s impossible. It’s about managing risk.

De-risking the portfolio after a strong rally helps limit drawdowns, smooth out volatility, and be able to take advantage of new opportunities. Because momentum or growth names can easily drop 20%, 30%, or even 40% when the market corrects by just 5% to 8%.

Hence, I’ve reduced my exposure a bit to adjust to current market conditions. The environment is a lot less predictable, and I’d rather stay flexible as things evolve. I’ll share more details in the upcoming weekly market update.