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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Bill Shepherd who wrote (5713)	7/2/1998 8:24:00 PM
From: Boca_PETE	Read Replies (2) \| Respond to of 42834

BillShep: re: <dollar-cost-averaging OUT of the market.> Approaching market bottoms, DOLLAR Cost Averaging maximizes the number of SHARES you buy. To maximize the number of DOLLARS you reap from taking profits approaching market tops, it makes more sense IMHO to SHARE Cost Average out of the market. Any comments - agreement ? P

To: Bill Shepherd who wrote (5713)	7/2/1998 11:15:00 PM
From: MrGreenJeans	Respond to of 42834

Bill "So...help me with the logic...if you wanted to reduce your exposure in the market (say go from 100 percent equities to 60 percent equities) AND you thought the market was going to flatten out, wouldn't DCA'ing out of the market be prudent? " Since the mid-1980's I have been 95% invested in equities. Some weeks ago with the market making all time highs and the price earnings ratios on a forward and trailing basis, particularly on the S and P 500 index, recording new records I felt it was prudent to reduce my exposure to equities to 65%. Why? I feel at these levels the market will end badly for most people. When the tide turns whenever that is and for whatever reasons-a federal reserve tightening, a deliberate slowdown in the money supply by the federal reserve, an economic slowdown, a profits recession, affects from the Asian crises, Abbey Joseph Cohen turning bearish, or from some other unexpected event-there will be little time to exit the market whole. So I simply decided to "start disengaging from the market early" and leave the remaining 5%-10%-15% ? to others. There are many ways to exit from the market, your suggestion being one, but the best choice is made by doing what you feel most comfortable doing. For me that choice is to sell into strength as equity prices rise. I did the some partial liquidations in my retirement accounts, as the market rose, so I would not be taxed and every time my allocation goes from 65% to 70% as it did this past week I take more profits to get back to 65%. Remember no matter what you do, stay fully invested, partially invested or decide to disengage from completely from the market "a profit is not a profit until it is realized / taken."