This week’s turn of events has increased my fear levels substantially. I’m already long bonds and via option positions as a hedge for my equities portfolio, but I think it is time to stay alert and not be inflexible and attempt to bag hodl ANYTHING forever.
There’s a long list of factors at play now, and it keeps getting worse the further we go into 2021, but stock market indices have gone vertical since last year so far.
I will try to time the top in individual stocks I hold, and trade with a mid to short term focus, so as not to take on a big drawdown by the time I can confirm a long term top in equities is happening. At some point this year, indices will stop going up, form a daily down trend and drop some 10-30%, then perhaps rebound and form a multi month or multi week consolidation before falling further, that will be the beginning of the end, and I don’t want to react too late.
Biden is doing all he can to derail the long term in US equities here. It’s a sight to behold. Props to him, if that was his goal.
The last time we had yearly trends expiring in equities it was the year 2000, and a decade long sideways/bear market ensued where hodlers didn’t have an easy time surviving.
You know what asset class did well during the crashes? Cash and cash alternatives…ergo, bonds.
Just some food for thought.