I got really depressed today even to the point of being kind of in a pissy mood watching my portfolio balance fall yet again!
Anyways I took a nap and after some contemplation and watching CNBC analysts tonight I've come to the happy conclusion that all this is necessary and healthy!
Our market was sick and is now purging itself and beginning the healing process! I believe this will take some time. Maybe a couple years.
This market has been artificially pumped to the limit for the last 12 years and all last year all I heard was “this is a super bubble”, “it's gonna pop like 2000” etc etc almost every single day. Well …. They were right!
So I've been 30% cash and if we have a rally some time next week I'm intent on selling more and “cutting my losses”….. As my dad used to say!
I now realize that this whole year and maybe next is going to chop around and I feel we will move lower and lower (sp500) until we bottom out somewhere in the 3000 to 2500 range and slosh around for maybe a year or so at 2500.
I don't believe we'll make any new highs this year, so why risk losing more? Steve Weiss of CNBC is 70% cash and I now want to join him and take a breather from the sidelines.
I am not selling out. I still have a long tern plan and believe in the 20 or so companies I hold, but I believe they're all going MUCH lower.
My plan is to make a temporary exit and keep about 30% in the markets in mostly energy and maybe MSFT AAPL GOOGL. This way 70% will be protected and waiting for sp500 2500 entries into either the index or good companies like MSFT.
As the markets sell to about 3200 I'll begin VERY slowly, share by share entering positions into a healthier valuation point instead of a bloated entry point that will chop lower over the year.
Anyways. I believe this sell off, correction, whatever is a very healthy thing and is much needed and now I am welcoming it with open arms! I'm excited!
I think when our portfolios go down we have 3 phases. First there's anger. Then there's denial. Lastly there is acceptance and welcoming it. We realize that the market is telling us that it was sick and unhealthy and now nature is taking its course and healing the markets!
So be reassured that this correction is long overdue and the ultimate result will be that we will be in a much healthier place and the market will be healing itself and stronger as a result!
Ultimately it will very slowly be able to pick itself up and continue on its onward march from a much healthier and fitter starting point.
No longer will we have to listen to the naysayers at sp500 2500 saying “the market is bloated”, “this thing's gonna go down!, etc!
Bears will be so sick of complaining and CNBC talking heads will be so sick of listening to themselves spouting the same old bearish commentary day after day that maybe we'll actually hear Tim and Guy say something positive for a change! Oh it will be refreshing!
Also I am reminded of one of John Bogle's sayings that “Accumulators should be down on their knees praying for a bear market that lasts for years”.
Us late to the game will actually be able to buy TSLA shares at $500, MSFT at $150, AAPL at $85 etc!
You have to ultimately ask yourself. Do you want to pay more or less for your shares?
I know my answer.
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