Expecting Fear and Panic to Prevail

"Insanity is doing the same thing over and over again but expecting different results." ~ Rita Mae Brown

I'm not normally one to completely exit the market.   I may go 50 to 60% into cash, but I always keep a significant amount invested in stocks.  This time, I'm bracing myself and our portfolios for a major decline in the stock market.  I've sold the majority of stocks in our IRA and taxable accounts and have less that 5% still invested.  I still have a major holding of stocks in my company's profit sharing plan, which I am not counting in the 5% and am keeping to hopefully do an  Net Unrealized Appreciation withdrawal six years from now. 
 
Here are my reasons for my giving in to fear:

The stimulus is a failure.  After 2-1/2 years,  the results from stimulus are abysmal.  Yes, I've heard all the excuses:  it took 8 years for the Republicans to create the issues, the stimulus didn't go far enough, can't expect a turnaround in such a short time, etc.   It doesn't matter why the situation exists.   What matters is the current situation is bad and not trending better. 

Obama and Bernanke deny seeing the issues.  Both have publicly stated that the economy is still recovering and nothing different needs to be done.  The current decline is only a "bump" or "soft patch."  They expect to continue the existing economic policy.  In my opinion, no change means no hope for improvement.

I remember the pain of staying in the market during 2008 - 2009 even though the economic situation looked bad and experts were telling me there were not any catastrophic issues.  I suspect there will be many others that remember the same pain, especially if the stock market declines for the seventh straight week.

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

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