Matt White
- While some retail investors are rushing to buy the dip, others are sitting it out.
- Angelo Sibilio and Matt White are increasing their cash allocations to de-risk their portfolios.
- Sibilio and White shared how they're feeling about the market volatility.
While some retail investors are scrambling to buy the dip, "cash is king" has emerged as the mantra for some others in 2025's tumultuous market.
That's the investing strategy Angelo Sibilio is adopting amid current market conditions.
The 35-year-old quantitative analyst felt uneasy about President Donald Trump's tariff rhetoric after Inauguration Day and decided to derisk accordingly, moving half of his portfolio to Treasurys and cash on April 4 — two days after Trump announced his "Liberation Day" tariffs, which sent the S&P 500 tumbling about 12% in the span of a week.
"I can't cash out my 401(k), so I went with a Treasury index," Sibilio said. "In my other accounts, I put half of my money into a money market fund."
Since then, the market has recovered its losses. But Sibilio doesn't feel like he's missed out on much.
"Not having to go through a couple of weeks where everything was going to hell gave me more peace of mind," Sibilio said. "I missed a little bit of upside, but that's not the end of the world for a long-term investment."
Matt White, a 33-year-old epidemiologist, also doesn't like the market's Trump-induced volatility and has increased his allocation to cash.
"I've never done this before, but I actually sold around $30,000 about 30 minutes before Trump started his Liberation Day speech," White told BI. "It was in my Roth IRA because I didn't want to create a taxable event, and I put it in the money market."
In addition to tariff volatility, White feels that many parts of the market, especially in the tech sector, are still quite overvalued, so he's content to keep a higher allocation to cash than usual.
"I still expect the market to drop," White said. "I think we're at a very irrational stage right now."
Panic selling or a strategic move?
Sibilio and White didn't feel like they panic sold. They're not scrambling to buy the dip either. They see the move to cash as a way to de-risk their portfolios in the face of elevated volatility from the trade war.
For some who are uncomfortable with the uncertainty in the market, reducing risk by holding more cash might not be a bad idea, as it creates a buffer if large market pullbacks occur. With the Federal Reserve holding off on cutting rates, investors can receive over 4% on money market funds and 10-year Treasury bonds. Increased cash levels also give investors dry powder should they wish to take advantage of a sell-off.
However, this defensive approach should really only be used by those with a shorter investing timeline. If you're planning not to touch your money for decades still, experts tend to warn investors against cashing out and say to stay invested instead. Getting out of the market during a drawdown can lead to missing out on the rebound and locking in losses. Markets can be volatile in the short term, and patience is key for successful investing, as the S&P 500 has typically returned 10% on an annualized basis over the last 50 years.
The most important thing is to contribute to your portfolio on a regular basis through dollar-cost averaging, according to Ashley Weeks, wealth strategist at TD Wealth. Investors with different risk profiles might consider holding more cash — for example, if you're planning to make a big purchase such as a house in the next couple of years — but otherwise Weeks recommends his clients avoid withdrawing from their portfolios during times of volatility.
White acknowledges this, but the volatility he's seeing feels unprecedented. Besides, he's only cashed out some of his Roth IRA and left his other tax-advantaged accounts alone. "It's always going to be better to have ownership in the market than carry cash, but I'm being more cognizant of the risk levels in the market," he said.
Angelo Sibilio
Wall Street vs Main Street
White and Sibilio's de-risking points to something bigger than just tariff headlines — they're also feeling distrustful of the fast-changing narratives coming from Wall Street.
Sibilio anticipates hedging his portfolio with a half-cash allocation indefinitely. Recent trade negotiations, while certainly a positive signal, aren't enough to convince him that it's a safe time to fully buy back in.
"I'm not necessarily looking for a certain price level to buy back in. I'm looking, first of all, for more certainty in the policy, and also business and consumer sentiment," Sibilio said.
"The big investment banks now say they're no longer projecting a recession, but they're reversing a position they took just a few weeks ago. You're not going to come in and out of a recession because of just one decision," he continued, referencing the recent trade deal with China.
Indeed, upon the announcement of a US-China trade deal, Goldman Sachs lowered its 12-month recession forecast from 45% to 35%. Similarly, JPMorgan lowered its recession risk from 60% to below 50% last week.
White sees an increased cash position as a way to minimize the impact of potential downturns caused by the trade war.
"Right now, this is a very high-risk environment, and it's not a bet I want to be a part of, so I'm going to have some cash on the side," White said.