I get calls from folks with money in the market, wanting to know if they’re in “the right position” or are they still in “good shape” with current market conditions.
Here’s my reply:
I am comfortable with what’s happening. I hope you are too. There are a lot of folks I manage money for with more cash ON the sidelines than they’re normally used to. Again, I’m OK with that.
Now here’s the reason WHY I’m ok with that:
When this market recently flipped to offense, it was at a level where I’d usually be preparing clients for the time when we begin taking money OFF the table – not plowing more money in.
So we started this most recent run already IN the high-risk neighborhood. And, as I wrote in a previous message, the short-term indicators are telling me it might be the 8th or 9th inning of the game.
So I’d rather err on the side of caution than subject us to some losses.
And if I am wrong (but I don’t believe I am), we’ve got plenty of cash to get back in the game. And the leveraged ETFs (exchange-traded funds) can get us back in the game quickly.
Please understand something else: if the market were to go through a healthy correction (meaning a 3% to 6% drop) in the near future, and remain on offense, we’ll be in an excellent position to run the table. That’s what I’m looking for, and will keep you posted when we need to take action.
Enjoy the rest of the Holiday Weekend!