Quote:
Originally Posted by XutvJet
I remain totally confused as to why the market continues to have upwards trajectory. Employment is really bad and I believe it will get worse. Right now, most of the lost jobs are blue collar. I'm a white collar worker in the environmental consulting industry and support mergers & acquisitions (due diligence). Our DD work has dried up 90%+ since mid-March. My private equity clients aren't doing deals for a multitude of reasons. The attorneys I work with have cut their hours significantly (i.e., taken big pay cuts). I'm taking voluntary vacation to help reduce the financial burden on our company. I'll likely be asked to temporarily reduce my hours and take a 20% pay cut and could possibly be furloughed. I have other white collar friends that are experiencing the same (mandatory vacation, furlough, pay cuts). I also have friends in the medical professional that have been furloughed or layed off because hardly anyone is doing elective surgery, PT, etc. I think the May and June unemployment numbers will be terrible.
As such, I feel the bottom is going to drop out in June/July (20%-30%+ drop). As the country opens back up (which I'm mostly in support of), I think there will be a second wave of outbreaks in the August-October timeframe and some of us will go back into a lock-down situation (maybe not as extreme). Hopefully the outbreaks will be better controlled and managed. A surge will certainly impact the market and the government can't keep sending out money it doesn't have.
I'm really wavering on selling a decent portion of my S&P 500 index funds and Berk Class B in my Roth, traditional IRA, and 401K and just holding it as cash. I wouldn't touch anything in my brokerage due to cap gains. These sales would represent about 15% of my total portfolio. I'm just trying to better manage the bleeding that I think is coming and trying to keep from taking a 40%+ hit like I did in the early 2000s and 2008-2011. Right now my total portfolio is down about 15% from it's peak earlier in the year.
I totally believe in long-term holding for the most part, but what I'm seeing makes no sense and this is a unique situation we're in right now. Am I off my rocker?
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Not at all.
An eventual dip is coming, I think it will be sooner than July, but we'll see. We're no more than 13-14% down from an ATH. The world is more than 13-14% fucked up. Hold on to your cash.