Preparing for a Significant Market Decline

"The market doesn't ring a bell at the top."  ~ trader adage
"If it's too good to be true, it probably is." ~ old adage 

Depending on which yield inversion (March 2019 or August 2019) chosen, the market is now 5-10 months past the inversion.  The market can rise as much as 30% and take as long as 24  months before peaking based on history.

While I'm enjoying (and benefiting from) this rally, I don't believe that it is sustainable.  There are too many indicators (eg. total market value/GDP, government deficit, Fed balance sheet, personal debt, corporate debt, etc) that are flashing "too high."   So I am being prudent and taking some profits off the table.

I've sold some of the total market indices (SPTM, VTI all sold, VOO  all sold, SCHB) and have taking profits on most of my peripheral holding (ie. shares of core holding purchased on dips).   Now I am starting to sell some core holdings.   Recently, I sold some Visa (V), Tesla (TSLA), Shopify (SHOP) and Apple (AAPL).    I have some sell orders for Microsoft (MSFT), Nextera (NEE) and Google (GOOG).    Due to all trades being commission free, I am scaling out 1-2 shares at a time, to benefit from the inevitable higher prices in the next few months.

I am waiting for some of my "value" purchases to recover to at least break even, and then start selling some shares.  Examples include Exxon (XOM), Occidental (OXY), Kinder Morgan (KMI) and Helmerich and Payne (HP).

Actually, I'm hoping, and would enjoy, the rally continuing for 6-12 more months.   Despite my skepticism, I have no complaints about the effect on my investments.   However, if the rally does continue for 6-12 more months, I am sure the market will truly be in "the danger zone."

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

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

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