Yesterday, the equally-respected Jeff Gundlach of DoubleLine said “investors seem to have been hypnotized that nothing can go wrong.” He advocates selling everything and buying gold. Despite the certainty of a recession somewhere in our future, I disagree with him.
One of the best practices in portfolio management is avoid making 100% bets, and selling everything is a 100% bet. If you are that concerned, just increase your cash position to, say, 25% and allocate your remaining stocks into consumer staples, which normally weather recessions fairly well.
Another thought is “that’s what makes a market!” Every time you buy a stock, there is a seller who doesn’t want it. Every time you sell a stock, there is a buyer who thinks that stock is a good deal. Investment strategists are the same way. Some are bullish, and some think the sky is falling. That’s what makes a market for ideas!
There has never been a day in American history when somebody was not standing on a street corner, wearing a sign that says “the end is near.” Listen respectfully, and then . . . be brave!