This has been a great nine-month stretch for our managed accounts. As I occasionally do, I am raising cash. I see enough warning signs to encourage me to be cautious here. There is no need to push it here.
The advance/decline line on the NYSE has already begun to show weakness.The number of new 52 week lows has increased. For those who know me, you know I watch these “internals” of the market. You need to go beyond just looking at indexes. While I love the holdings in our portfolios, many are “short-term overbought”. In these conditions, in my more active strategy, we have just gone 40% to cash.
I am not expecting a huge bear market to show up here. I am looking for a summer swoon followed by a Fall recovery. Most investors say they are OK with 10% pullbacks, but are not so calm when they come. I prefer to step aside, raise some cash, and buy back in when more fear is in the air and lower prices are available again.
With our accounts at new highs, I am blowing the whistle…taking a breather and just not pushing it here. The internals suggest taking a lower risk profile. Be careful out there!
By Jordan Kimmel, Chief Investment Officer at Investview, Inc. (INVU).
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer