Saturday, May 10, 2008

Time To Increase Cash Position

The stock market results of the last two weeks have left me unimpressed. Currently, the stock market is at one of those critical inflection points where it can go either up or down. Good news from the past few weeks have caused the market to rally, with specific stocks such as Google, Priceline and Apple doing particularly well. The rally has weakened in the past couple weeks and there is also still a lot of bad news being reported, such at American International Group's earnings.

At this point, I believe the stock market is likely to go down, in the short term. Although I have already sold some shares, I plan to further reduce my exposure to stocks by selling more positions in my personal accounts, including some that have not yet received a sell signal. In case my call is wrong, I will continue keep my investments in the accounts managed by our financial advisor, since these are long term diversified holdings.

For reference, I will look to sell shares in Google and, perhaps, I will wait for Potash to become a long term holding, in early June, before selling any shares. At this point, I don't plan to sell Intuitive Surgical.

I will also update my Stock Buy List that is based on a modified version of the Unemotional Investor Growth System. Should there be a downturn in the market, I want to be prepared to purchase from my new Stock Buy List at a discount.

Disclosure: At the time of publication, I own shares of Google, Priceline, Potash and Intuitive Surgical in the accounts I trade.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

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