I am reducing stock holdings to about 30% based on yesterday’s SELL signal. My retirement account requires a move be placed before 12 noon and that will be effective at today’s close. I am happier if the S&P 500 rises today, Tuesday, since I would prefer to sell as high as possible.
Leaving 30% in stocks (thru ETFs, mutual funds, etc.) means that if the market were to crash 50% from here, I would only lose 15%. On the other hand, leaving 30% invested recognizes that this move may be wrong and if the markets move up, I will still have some funds invested in the stock market. No system is perfect.
This doesn’t feel like the big crash that has long been predicted by Hussman and others. Still, I will be cautious given the uncertainty now present. I’ll immediately begin looking for a re-entry point.
OIL STILL FALLING
Oil continues to fall and that is a continued worry for the markets. As of 10:30 AM (Tuesday) the Brent crude benchmark was down 3%. The WSJ listed a series of issues that are affecting stock prices. The most logical to me:
“The oil price is reinforcing the possibility of a
default by Russia. That would have an impact on financial institutions and
economic activity in Europe, and it is making people nervous.” Story at…
http://www.wsj.com/articles/european-stock-slide-continues-1418720770?mod=WSJ_hpp_LEFTTopStories
