Scaling Out and Protecting Profits

"Danger, danger, Will Robinson!" ~ Robot from Lost in Space

As 2019 wraps up, I've made a conscious decision to sell some of our core stock holdings to lock in profits and increase our available cash.

Here are my reasons:

• Fundamentals (earnings, P/E etc) don't support current stock valuations.   Stocks appear to be overbought. 
• Several indicators show the market is overvalued.   The Buffett metric is at 145% for stock market valuation/GDP.   The metric peaked in 2008 at about 118% and in 2000 at 161%.
• Debt (personal, corporate and margin) is at an all time high, fueled by low interest rates.
• Expectations are high that the market advance will continue into 2020.

At this point, I am not exiting the market immediately nor am I exiting the market completely.   With stock trading commission going to $0, I plan to take about 10-20% of the profitable position out of the market.  Some positions I will take to zero. Others, I will remain 20-80% invested.  For the managed accounts, I will keep the amount invested at or near minimum requirements.

For clarification, I am not predicting an imminent decline.  Nor am I shorting the market.  However, I think the downside risk is much higher than the upside potential.   So I am willing to forgo some gains to sleep better at night...

For more on  New Beginnings, check back Sundays for a new segment.

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

Copyright © 2019 Achievement Catalyst, LLC

Investment Strategy - Near Term

The stock market seems overvalued.

Here's are short term strategy:

• Keep 3-5 years expenses in cash and cash equivalents.
• Keep intermediate funds (5-10 years) invested.
• Keep long term fund in cash, ready to invest in a pull back or bear market.

At this time, the downside risk seems higher than the upside potential.  So we have reallocated accordingly.   If the market falls, we are protected.  If the market continues upward, our intermeidiate funds will participate.

For more on  New Beginnings, check back Sundays for a new segment.

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

Copyright © 2019 Achievement Catalyst, LLC