MarketWatch recently featured Jim Stack, editor of the Investech newsletter as saying that “Bull Markets don’t die of old age, they die from deterioration and economic imbalances, and we are seeing economic imbalances now.”
That’s been my experience as well, and I agree with his assessment. While he did not predict a speedy end to the bull—election-year politics may help it run longer—he now advocates a cash position of some 50%. However, he also recognizes that the market run could continue for another 16 months.
While all of his arguments are valid observations, the fact remains that they are still guesses or predictions about the future. That’s the problem I have. I can’t agree with making changes to investment positions just because this or that event may or may not happen in the future.
My preference is to see actual changes in trends and prices, which can be measured, before adjusting my investments.