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Current percent cash allocation vs. target cash allocation for portfolio?

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  1. #21

    Join Date
    Jan 2022
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    21

    I agree with no way out and holding on tight. PE doesnt seem like a great idea -- just as levered to the economic cycle and low interest rates, and for sure valuations will get marked down. Anyway soon enough the politicians will go from fighting inflation to fighting recession (to say nothing of sovereign debt and what happens to a government's ability to service debt with tax receipts in a recession and rising rates), so what else are they going to do other than reverse course and bring out the QE bazookas again eventually. Really quite an amazing scam.


  2. #22

    Join Date
    Jan 2020
    Posts
    257
    Quote Originally Posted by aw451:
    What do you know that the market currently doesn't?
    Would you think I'd disclose it here?

  3. #23

    I think to comfortably hold significant equities here (as opposed to cash), one should really be able to articulate both why the blue bar is justified and why the red bar will not be decreasing soon.

    I can't do either and find this detail pretty scary.

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  4. #24

    @Gollygordon

    Yes, even Berkshire has had multiple expansion. Table 1 is also interesting - many stocks have already re-rated - small profitless tech stocks were the first to do so. Others - including Big Tech - may still have some way to go. However, given how cash is being eroded by inflation I don't think stocks are going out of fashion - but definitely important to pick wisely.

    https://www.longvieweconomics.com/ne...n-tina-unwinds

    Gollygordon likes this.

  5. #25

    Yep fair enough.


  6. #26

    Join Date
    Jan 2022
    Posts
    21

    What is most likely to occur after deflation though? On a multi-year/decade view, the reason not to sit in cash now waiting for the turn and indeed to continue and perhaps even ramp up accumulation through the coming months and quarters (not financial advice!!!) despite the risks and likely volatility is that for most people the turn will not be obvious and attempting to trade it will simply result in chopping their accounts to death.

    So, looking at the graph. US economic data is showing signs of rolling over, so we can say with reasonable probability that earnings are heading south. But does earnings down = stocks down or will the market discount the policy response, and when would the market start doing so if it were to do that. I don't think there is an obvious answer to these questions.

    ndt likes this.

  7. #27

    Join Date
    May 2021
    Posts
    1,733

    I am actually hoping and wishing market to fall further and remain low for a while unlike roller coaster down and quick up moves for 1) longer opportunity for DCA and accumulation of stocks at lower price with monthly reinvestment 2) Healthy mid/long term return..

    Gollygordon likes this.

  8. #28

    Yes I agree. Despite technically being poorer than I was 6 months ago, I'm feeling increasingly excited about my positioning ahead of and during what may become a defining 18 months.


  9. #29

    Join Date
    Oct 2006
    Location
    Hong Kong
    Posts
    15,557

    Isn't it best just to have 100% allocation of assets in crypto?

    aw451 and Gollygordon like this.

  10. #30

    My record crypto exposure was over 95%. It was the best of times and the worst of times.