When markets tumble or layoffs loom, most people scramble to react. But smart investors don’t flinch. They prepare in advance. The real test of your financial plan isn’t how well it performs during a bull market. It’s how calmly you react when life throws you a curveball.
Liquidity Buys You Peace of Mind
I spoke recently with a client juggling family events, overseas travel, and the possibility of her husband being laid off from his high-level tech job. Still, she sounded relaxed. She hadn’t checked her investment portfolio in weeks.
Why? Because she had margin built into her plan. When she onboarded as a Profile client several years ago, we noticed she was holding about $150,000 in cash, far more than needed. We moved $100,000 into a CD to earn better interest, leaving enough for short-term needs. The rest of her portfolio stayed put. She was calm, knowing she had cash that was available, if need be.
Liquidity isn’t wasted money; it’s breathing room. It means you don’t have to sell stocks at a loss or make knee-jerk decisions when life gets messy.
Tax Confusion Can Be a Silent Threat
She also had savings in an Israeli private pension fund. As a U.S. taxpayer, she suspected tax complications but couldn’t get a straight answer. Her insurance agent focused on the Israeli side. Her accountant was vague on the American side. No one could explain how the two systems fit together.
That’s where we stepped in. We showed her how the IRS often views these pensions as PFICs (Passive Foreign Investment Companies), which can trigger complex reporting and unexpected U.S. tax bills. Simply contributing without clarity could have created years of filings and penalties.
By pressing pause until she understood the full picture, she avoided costly mistakes. More importantly, with the help of her accountants and financial team, she gained a roadmap for how to handle her pension going forward.
Strong Portfolios Don’t Demand Constant Attention
Even with her husband’s job uncertainty, this client didn’t panic. She and her husband had a substantial amount in their Israeli savings account to cover expenses for several months. Their plan was doing its job quietly and effectively.
A resilient portfolio isn’t loud or flashy. It protects, cushions, and lets you focus on your life not the market’s movements.
Want to feel that kind of financial confidence? Schedule a free Cross-Border Financial Evaluation at profile-financial.com/call. We’ll see if and how we can help.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates provide tax or legal advice.
Published December 31, 2025.