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I'm not raising cash intentionally but I'm not spending what I earn either. At this point in time I don't feel the need to look for anything other than bargain sales when, and if, they occur. Captain Price is leading the way.
Don't know why you'd raise cash in January?? I guess what you're really asking is a market timing question and can't help you there.
We normally take most of our annual IRA distribution in January. Gets a bit challenging factoring that in to the overall allocation picture. With energy on the rocks, I'll take a bit more from the fixed income side and let my Nat Resources fund run.
Net-net, our allocation to cash/fixed income will drop slightly after the new year.
hank, I don't believe i'm asking a "market-timing" question. I guess what I am trying to say is that I am planning on making some portfolio changes and considering the nice run-up we've had and seasonality/history, somewhat, do I sell into this run-up, raise cash and re-allocate those funds?
The question thus is, do I D.C.A. soon/now or maybe wait for that "impending" correction to begin re-allocating? I do understand "waiting" can lead to "opportunity" costs (i.e. loses) which I have incurred before.
Raising cash as I unwind my special equity spiff position that I built through most of October as we move into the 1st Quarter of 2015. For those that have been following my recent post then you know of my strategy in doing this.
We are still in secular bull market, albeit probably in the late innings, and just entering the strongest quarter for stocks. Why play games to avoid a potential shallow 4-6% pullback lasting 1-2 weeks that you cannot time anyway.
@MFO Members: I agree with DlphcOracl that we are still in a secular bull market, and my forecast of a 15% return, made last February, in 2014 for the S&P 500 is right on (2,215) target. For 2015, I predict the S&P 500 will close at 2,401 a 13% rise for the year. Regards, Ted
I am adding an additional comment to this thread which reads ...
As of Friday December 26th market close Morningstar's Market Valuation Graph is reporting that stocks, in general, are selling at about six percent above their fair value. At these levels, I think I'll still continue with my plan to unwind my spiff and sell about another four to five percent of my equity allocation off over the coming weeks. In short words, I plan to reduce my allocation to equities by about ten percent during the first and possibly second quarter of 2015 as long as stocks remain well overbought.
I have provided a link below to the graph for those that would like to reference it.
And, yes, I think now is a good time, for me, to rebalance and raise a little cash as I am now overweight equities within my asset allocation. I am not adding to my bond allocation as I have been studying my balanced and my asset allocation funds and, for the most part, they seem to be reducing thier bond allocation. Lately, I have been wanting to keep my overall allocation to bonds at about 25% within my portfolio; however, due to asset movement in my balanced and asset allocation funds my overall allocation to bonds has now dropped to about 22% within my portfolio.
Perhaps, this asset movement by some fund managers from fixed income securities to equity securities explains, in part, the current equity market rally propelling equities well into overbought territority.
I will agree with most here that raising cash for a possible correction is more like gambling than it is investing. Now, if you had mentioned rebalancing like some are doing like Old_Skeet and scott, then that is a good idea. Keeping your asset allocation in check once a year gives you the opportunity to add to fixed income if stocks have had a good year and vise a versa.
Comments
I guess what you're really asking is a market timing question and can't help you there.
We normally take most of our annual IRA distribution in January. Gets a bit challenging factoring that in to the overall allocation picture. With energy on the rocks, I'll take a bit more from the fixed income side and let my Nat Resources fund run.
Net-net, our allocation to cash/fixed income will drop slightly after the new year.
The question thus is, do I D.C.A. soon/now or maybe wait for that "impending" correction to begin re-allocating? I do understand "waiting" can lead to "opportunity" costs (i.e. loses) which I have incurred before.
Matt
Emerson: "To be great is to be misunderstood."
Raising cash as I unwind my special equity spiff position that I built through most of October as we move into the 1st Quarter of 2015. For those that have been following my recent post then you know of my strategy in doing this.
I wish all … “Good Investing.”
Old_Skeet
We are still in secular bull market, albeit probably in the late innings, and just entering the strongest quarter for stocks. Why play games to avoid a potential shallow 4-6% pullback lasting 1-2 weeks that you cannot time anyway.
Regards,
Ted
I am adding an additional comment to this thread which reads ...
As of Friday December 26th market close Morningstar's Market Valuation Graph is reporting that stocks, in general, are selling at about six percent above their fair value. At these levels, I think I'll still continue with my plan to unwind my spiff and sell about another four to five percent of my equity allocation off over the coming weeks. In short words, I plan to reduce my allocation to equities by about ten percent during the first and possibly second quarter of 2015 as long as stocks remain well overbought.
I have provided a link below to the graph for those that would like to reference it.
http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx
And, yes, I think now is a good time, for me, to rebalance and raise a little cash as I am now overweight equities within my asset allocation. I am not adding to my bond allocation as I have been studying my balanced and my asset allocation funds and, for the most part, they seem to be reducing thier bond allocation. Lately, I have been wanting to keep my overall allocation to bonds at about 25% within my portfolio; however, due to asset movement in my balanced and asset allocation funds my overall allocation to bonds has now dropped to about 22% within my portfolio.
Perhaps, this asset movement by some fund managers from fixed income securities to equity securities explains, in part, the current equity market rally propelling equities well into overbought territority.
Old_Skeet