The last two weeks have significantly eroded my confidence in the economy and our stock investments. Next week, my plan is to sell the remaining investments in our managed accounts, which will reduce our stock investments to below pre-November 2010 levels. Then, I will wait for the inevitable decline in the stock market. I'm prepared for at least a 20% decline.
Why the drastic measures? It seems to me that the government is as clueless now as it was in 2007 - 2008 with the sub-prime mortgage crisis. Based on the past 2-1/2 years, I have no confidence that the government will take the right steps to grow the economy. For the next few months, I believe the downside risk is 2-3 times higher than the upside potential. I can't afford to continue to hold stocks, as I did in 2008, and allow our retirement and savings accounts decline precipitously.
The pain of the market decline of 2008-2009 is still a fresh memory. By being primarily in cash, I will be less worried and better able to sleep at nights :-)
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i think it may be a good time to short the market?
ReplyDelete@Jack,
ReplyDeleteI am considering shorting, but will wait for a longer down turn before starting.