I will not argue with anybody with the guts to liquidate their entire portfolio. I tested myself on that four months ago, and found I went right back in. Now I'm in gradual liquidation mode again, trying to get myself into high-dividend and stable REITs (EGP, LHO), Asia (APF) and microcap net-nets (PSO). The common denominator is low correlation with the U.S. market. So even though I didn't have the guts to go all cash, I have well over 50% of my portfolio in these three categories. Plus another 10-15% in cash. Its very easy to say cash is better than value stocks. I probably agree with you. If the market tanks, low P/E stocks are going to drop too. But I don't think the three categories I mentioned go down much, yet they also give me some offense (PSO and HYDEA have made me more money than any index investment would have, and the REITs I have bought have held up just fine. Asia has not been fun though, but that's five year money). My challenge to you is if you actually believe your analysis, what is your cash position. Given what you say, if you're not holding 50% cash, you need to rethink your conviction level.
JJC |
