In posts earlier this summer, I pointed out that selling just 1% weekly of a 100% invested portfolio would have allowed you to raise 50% cash in a year, or about 25% cash in the remainder of 2017. Have you tried doing that? Are you still 100% invested? Or have you reduced your exposure to the market to 90% by now bringing in 10% to cash for use when the next buying opportunity arises?
Why would I raise cash Dr. J? The market is going to go up forever and if I take anything off the table, I’ll miss out! However, if you only buy and NEVER SELL, you have never realized those potential gains until you lock them in. If you have already managed to buy low, isn’t it time to sell high?
The July 24th, 2017 weekly letter to shareholders published on the web by Hussman Advisors, is a stark reminder of how richly this U.S. market is priced. Using his models, the estimated 12 year return on money invested TODAY (or remains invested) is ZERO and a portfolio mix with stocks, bonds, and cash is just above 1% per year for those 12 years. Please, read the article and decide if being 100% invested makes sense for your individual situation. Hussman Weekly Letter
I am not telling you that the market is going to ZERO…but a strong correction is well overdue and the current valuation model of many long term investors is flashing a warning light. Paying heed might be the best investment “opportunity” at the moment!