Monday, September 26, 2011

Wait and See Strategy

For now, I'm sitting on the sidelines and waiting to see how the European sovereign debt crisis unfolds. Two technical analysis blogs that I follow posted SPY -- at best still bottoming, worse to come?  and S&P 500 Chart – Do or Die Moment.  I agree, the direction is not very clear and there will be a lot of volatility.   To me, it's not worth the risk to be in the market.  The downside risk is higher than the upside potential.

Yes, I may miss a big short term advance.  However, I am avoiding the gut wrenching declines like last week.  To me, trade off is worth it:  I sleep better at nights.   Besides, with interest rates so low, the U.S. may risk the issue that Japan is experiencing-- deflation.   So being in cash feels pretty good right now.
For more on Strategies and Plans, check back every Monday for a new segment.
This is not financial or investing advice. Please consult a professional advisor.

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