Roughly 100 years ago, the American Bill Gorton asked drinking buddy Mike Campbell how he went bankrupt. "Two ways," Campbell answered, in what would become an enduring truism from Ernest Hemingway's The Sun Also Rises. "Gradually, and then suddenly."

The same might be said for America's family farmers, grappling for years with lower crop prices, higher interest rates and other challenges while watching the slow depletion of their working capital. Now, many are sliding rapidly toward financial ruin under the added economic strain of the US war with Iran.

The ISM is (finally) accelerating higher, last month printing above 56, showing the economy is expanding (fast).

Earnings across the S&P 500 are absolutely crushing, well above bull market levels from 2021!

Earnings are booming, yet payrolls aren't moving. It's not that the job market is bad, but it's not boom-level good either.

Inflation has actually been coming down over the last 2 months rather than increasing. The only reason it's above 3% in the first place is because the price of oil is artificially high due to the U.S. / Iran war, it has nothing to do with a booming economy.

The market, which was once pricing in a rate hike for September, has completely switched to a 70% chance that rates remain the same in September.

For as long as there have been financial markets, there have been warnings of market bubbles and looming corrections. While this time is no different, it still poses a thorny dilemma for financial advisors charged with helping clients navigate whatever the next market cycle brings without doing too much damage to their savings and investments.

Four years in, a bull market for US equities that followed the 2022 correction has started to attract some gloomy forecasts, largely because it's underpinned by an artificial intelligence wave that could easily be described as overvalued under multiple measures.

Recent remarks by billionaire Bridgewater Associates founder Ray Dalio warn of a potential liquidity crisis for investors and underscore the distinction between net worth and the kind of actual cash that could be needed in a market pullback. "Wealth is not the same as money," Dalio said. "You see a lot of people getting wealthy but you can't spend the wealth."

For seasoned financial advisors, preparing for the worst never hurts. "The market returns have been fantastic, and it is unlikely to continue at the current pace over the next few years; however, it's impossible to predict when or why the next downturn will come," said Jon Lapp, founder of Haven Financial Advisors.

Beyond the knee-jerk reaction of trying to time major market movements, some financial advisors are double-checking client portfolios to ensure proper liquidity in the event a market correction puts some dents in holdings. Managing liquidity is the delicate balance of keeping enough cash available that clients are not selling low, either to meet basic expenditures or to fund major planned events like weddings, vacations or real estate acquisitions.

"Liquidity is often more valuable than investors realize because its importance tends to become apparent during a major downturn, when access to cash may become more difficult," said Alex Shahidi, senior managing director at Evoke Advisors. "We help clients separate long-term assets from near-term spending needs by maintaining adequate liquidity and stress-testing portfolios against adverse scenarios."

Tracy Gallagher, head of investment strategy at Allocate, said liquidity management is not something you wait to address. "The best time to have this talk is when no one is asking for it," she said. "Deal with it in a rally, when forms of liquidity and diversification are a lot easier to achieve in a portfolio." Gallagher said she matches cash and short-duration assets to known spending needs so that a market decline doesn't create a forced sale or withdrawal.

A key part of the strategy is ensuring clients understand the importance of liquidity inside an overall portfolio. "There is a lot of liquid-ish or liquid-with-a-price-tag net worth, such as concentrated single-stock positions that can be hard to unwind, and vested but illiquid equity compensation can lead to similar problems," Gallagher said. "Mapping liquid holdings next to true cash and cash equivalents can help clients grasp the true liquidity in their portfolio."

For the most part, liquidity management is a bigger concern for investors in or near retirement when the income is generally fixed and there is a dependence on a retirement portfolio.

For those clients still in the accumulation phase, market pullbacks can be blessings in disguise, according to Edward Mahaffy, president of ClientFirst Wealth, Legacy & Estate Planning. "If you are early in the wealth accumulation phase, you are able to continue accumulating shares at cheaper levels when a selloff occurs," he said. "As always, the devil is in the details. If you own index funds, you should be aware of the weighting to more volatile sectors, such as tech, for instance, which has a large weighting in the S&P 500."

Ryan Marshall, a partner at ELA Financial Group, believes advisors and market watchers should use caution when calling stock market tops or describing them as bubbles. But he is cognizant of looming risks building across the artificial intelligence categories. "You will never consistently pick the perfect time to buy or sell," he said. "At this point, we are focused on managing concentration risk, maintaining appropriate liquidity and keeping portfolios aligned with each client's long-term plan."

There are two types of business pitches: raise VC funding for an AI-powered plumber booking tool, or borrow some cash from your mom to start a company that actually fixes people's toilets. Many enterprising folks are lured by the latter path—rejecting innovative business ideas to found unglamorous companies like carwashes or childcares, known as sweaty startups.

The term was coined by the entrepreneur and content creator Nick Huber, who started a storage business while studying at Cornell University in 2011, grew it to 25 college towns, and eventually sold it for $1.7 million. Aside from running a storage private equity firm, a real estate consulting company, and a staffing agency, he now makes content advising aspiring entrepreneurs on starting low-risk businesses that don't need to be explained to anyone.

No need to reinvent the wheel

Huber thinks the way to go is starting a local business and patiently growing it to achieve a solid income, an approach he details on his podcast and in his book, The Sweaty Startup: How to Get Rich Doing Boring Things:

• He contends that, unlike hyped Silicon Valley startups or trendy services like yoga instruction, old-school businesses are more likely to succeed, since competitors are often weak and there's stable demand.
• His list of recommended businesses includes mold removal, firewood delivery, and portable toilet rental services.

Huber isn't the only one who made a business out of talking about running a business. The 24-year-old Micah Stanley—who makes up to $75k a month from operating vending machines that sell vapes—makes videos and teaches courses on how to follow in his footsteps.

There's evidence that