Keeping My Powder Dry
Market Update: 2009-03-11
After my Market Update "Time to Sit and Wait" on March 5, I got an inquiry as to whether or not I had moved all my stock positions into cash. Just to clarify, I am definitely not in all cash.
I have about 30% of my portfolio in cash, the rest is in the market. On February 18th I upped my cash position by selling some of my S&P 500 fund and moving the proceeds to cash. That move took my cash position from 20% to 27%. I was pretty sure support wasn't going to hold, so I sold out when the index closed at 790. I did this so I would have extra money to use later if things get really bad. With the market falling further since then (as low as 676 two days ago), my cash position is now around 30%. I have also not bought anything since the S&P 500 broke its support at 750.
To be clear, I am just keeping my powder dry until the market shows me a more convincing effort to make a bottom. In the meantime, if we get a meaningful rebound rally back to the resistance levels (i.e., former support levels) of 750-780 and cannot break above, I may decide to sell some more S&P 500 into the rally and further bolster my cash position. I will let you know what I do if and when that time comes.
We will know more later. Until then, Happy Investing.
Gregory Guest
After my Market Update "Time to Sit and Wait" on March 5, I got an inquiry as to whether or not I had moved all my stock positions into cash. Just to clarify, I am definitely not in all cash.
I have about 30% of my portfolio in cash, the rest is in the market. On February 18th I upped my cash position by selling some of my S&P 500 fund and moving the proceeds to cash. That move took my cash position from 20% to 27%. I was pretty sure support wasn't going to hold, so I sold out when the index closed at 790. I did this so I would have extra money to use later if things get really bad. With the market falling further since then (as low as 676 two days ago), my cash position is now around 30%. I have also not bought anything since the S&P 500 broke its support at 750.
To be clear, I am just keeping my powder dry until the market shows me a more convincing effort to make a bottom. In the meantime, if we get a meaningful rebound rally back to the resistance levels (i.e., former support levels) of 750-780 and cannot break above, I may decide to sell some more S&P 500 into the rally and further bolster my cash position. I will let you know what I do if and when that time comes.
We will know more later. Until then, Happy Investing.
Gregory Guest
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