You can read until you’re blue in the face about how the current high level of cash is a bullish signal. That investors, fearing they’re missing the boat may begin to pile into the stock market. That may be the case, but does it mean you should increase your allocation to stocks? It depends. Do you have the patience to hang in there if they fall in value by say 20 percent? Or are you hoping for a gain of 20 percent to make life “easier?” I think you’d be wise to remember what my father in law Dick Young says, “Hope is not a strategy.”
You can also read about how the investment committees of state and local pensions are increasing their planned allocations to stocks and “alts.” Good luck! To me, this is bearish for stocks because underfunded plans are certainly needy and are hoping for stocks to do something. But that’s what happens after years of underfunding and mismanagement.
Remember, when it comes to the stock market, bad stuff happens.
You can count on it.
If you’re investing new money in stocks today, make sure you can afford to live without it—that you won’t sell if they lose value. Imagine you’re cooking on a counter-top Rotisserie: Set it and Forget it!
E.J. Smith - Your Survival Guy
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