Look at the Russell!
Look at the Nasdaq! Are you seriously still holding onto your Dow, S&P and NYSE stocks? That's exactly what people did in 2008, when they were so used to the markets being saved whenever they dipped, that they ignored all the warning signs – until it was too late.
I know that I've been sounding like a broken record and you can call me Chicken Little but cut me a little slack as we are protecting profits here.
We have 5 virtual porfolios we track for our Members and the $100,000 Butterfly Portfolio is up 19.4% ($19,000), the $500,000 Long-Term Portfolio is up 9.6% ($48,000), the $100,000 Portfolio is down 5.8% ($5,800), the $500,000 Income Portfolio is up 6.4% ($32,000) and our $25,000 Portfolio is up 15.4% ($3,850). Overall, that's a gain of 8.8% on $1.225M deployed in 4 months.
The Short-Term Portfolio is a hedge to the Long-Term Portfolio, so we haven't cashed those in but the Income Portfolio doesn't have an external hedge, so we moved to cash on that one last month (BEFORE the Nas and Rut started crashing off decade highs) and the Butterfly Portfolio is self-hedging while the $25KP has just one position left.
Perhaps I'm wrong and the Nasdaq and the Russell will recover and the other indexes will all move up to new highs. Even if they do, our worst case is we miss a bit of a rally. If we're breaking out to new all-time highs from here – there will be plenty of money to be made. BUT – if I'm right and the market drops 5-10%, then our taking 110% off the table at the top means that when we buy stocks again at 90%, we are buying 120% of what we could have bought had we not wisely cashed out in the rally.
The REWARD for being cautious is owning 20% more shares if we're right, owning maybe 2.5% less shares if we're wrong or owning the same amount if the market stays flat. It doesn't take a degree in statistical analysis to see why I…
