A solid read with some well researched hard to refute data points René.
I've always managed $CASH as a position in my own portfolio, varying it to account for my internal barometer on valuations and overall market sentiment. I played 2022 fairly astutely, moving from 3% to 26% cash before the major sell-off in growth stocks, but there was a fair degree of luck in that timing, so I aim to be a little more cautious in my forecasting this time around.
Overall though, it feels like there are still several significant catalysts for continued growth yet to fully play out - Fed rate cuts, deregulation of AI, a friendly M&A environment, and a bunch of other smaller impacts for individual companies in my portfolio (e.g. Tesla FSD wide rollout).
I'm currently at 17% cash and in 'wealth accumulation' mode as I continue to gradually deploy this, mostly by trying to find sensibly valued opportunities in smallcap tech and in income-growth stocks. I have a short-term target of getting to 15% by the end of Q3, but am also trying to be fairly alert to a change in the market mood, recognising that this could very well strike before I can act. If I do elect to flip back into 'capital preservation' mode, I know exactly where I'm going to trim the portfolio so I can get back to 25%+ cash.
(The irony is not lost on me that I behave like I know how to time the market, while also recognising that this is impossible 🤷♂️)
Thanks Rene, I really appreciate your clear an approachable writing style !
My comment is similar to Luke's tho from a different perspective: as a retiree i'm in 'capital appreciation - income generation' mode.
The last time I went to a significant (>10%) cash position was in the ~ 18 month period preceding March 2020... when I was well positioned to go bargain shopping on the day of the covid crash. And that was an epic day, as just about everything got sideswiped in the downdraft.
I'm not sure Mr. Market may be heading towards something similar or as dramatic, but still as you eloquently describe the signals you identify are compelling and shouldn't be ignored. From my perspective, an apparent additional concern is the apparent setup for $US devaluation over time such that the Historic debt of the US can be 'managed' in the immediate term. In my case the situation is abit more complicated, as a Canadian investor trying to navigate troubled trade and tarrif policy headwinds.
My current strategy to mitigate geological risk is to underweight US equities, mainly by swapping them and some similar Canadian positions for global higher yielding large caps, while holding back some cash to take advantage of any downturn that may occur. If any of these happens to have an apparent moat or defensive aspect, so much the better !
I have also moved to overweight in precious metals and critical minerals producers. I may have some advantage over a typical investor in this sector, as i'm a retired geological engineer with a background spanning mineral exploration, mine development and operations to specialist consulting services. So i don't view this sector as being 'inherently risky', but it does demand doing your homework and paying attention to the quality of a deposit, inherent operational challenges which may be present, and catalysts which may impact future performance, to guide both investment and divestment decisions.
Instead of worrying incessantly about when the top is coming, pay heed to price alone. Key is position sizing based on trend turns. Good multi time frame price based model will help you to do the position sizing of individual security/sector. Periodic profit taking will preserve part of the gains and lead to stree free trading/investing.
A solid read with some well researched hard to refute data points René.
I've always managed $CASH as a position in my own portfolio, varying it to account for my internal barometer on valuations and overall market sentiment. I played 2022 fairly astutely, moving from 3% to 26% cash before the major sell-off in growth stocks, but there was a fair degree of luck in that timing, so I aim to be a little more cautious in my forecasting this time around.
Overall though, it feels like there are still several significant catalysts for continued growth yet to fully play out - Fed rate cuts, deregulation of AI, a friendly M&A environment, and a bunch of other smaller impacts for individual companies in my portfolio (e.g. Tesla FSD wide rollout).
I'm currently at 17% cash and in 'wealth accumulation' mode as I continue to gradually deploy this, mostly by trying to find sensibly valued opportunities in smallcap tech and in income-growth stocks. I have a short-term target of getting to 15% by the end of Q3, but am also trying to be fairly alert to a change in the market mood, recognising that this could very well strike before I can act. If I do elect to flip back into 'capital preservation' mode, I know exactly where I'm going to trim the portfolio so I can get back to 25%+ cash.
(The irony is not lost on me that I behave like I know how to time the market, while also recognising that this is impossible 🤷♂️)
Luke
What do you think of downside protection in times like these? Eg. Long put options sp500
Personally, I don't do options. But of course in theory that's one possible hedge.
Thanks Rene, I really appreciate your clear an approachable writing style !
My comment is similar to Luke's tho from a different perspective: as a retiree i'm in 'capital appreciation - income generation' mode.
The last time I went to a significant (>10%) cash position was in the ~ 18 month period preceding March 2020... when I was well positioned to go bargain shopping on the day of the covid crash. And that was an epic day, as just about everything got sideswiped in the downdraft.
I'm not sure Mr. Market may be heading towards something similar or as dramatic, but still as you eloquently describe the signals you identify are compelling and shouldn't be ignored. From my perspective, an apparent additional concern is the apparent setup for $US devaluation over time such that the Historic debt of the US can be 'managed' in the immediate term. In my case the situation is abit more complicated, as a Canadian investor trying to navigate troubled trade and tarrif policy headwinds.
My current strategy to mitigate geological risk is to underweight US equities, mainly by swapping them and some similar Canadian positions for global higher yielding large caps, while holding back some cash to take advantage of any downturn that may occur. If any of these happens to have an apparent moat or defensive aspect, so much the better !
I have also moved to overweight in precious metals and critical minerals producers. I may have some advantage over a typical investor in this sector, as i'm a retired geological engineer with a background spanning mineral exploration, mine development and operations to specialist consulting services. So i don't view this sector as being 'inherently risky', but it does demand doing your homework and paying attention to the quality of a deposit, inherent operational challenges which may be present, and catalysts which may impact future performance, to guide both investment and divestment decisions.
Please keep it coming Rene !
greg
Instead of worrying incessantly about when the top is coming, pay heed to price alone. Key is position sizing based on trend turns. Good multi time frame price based model will help you to do the position sizing of individual security/sector. Periodic profit taking will preserve part of the gains and lead to stree free trading/investing.
Many roads lead to Rome.
This is not about worrying but about exploiting market extremes.