Friday, September 7, 2012

Weekly Wrap | Follow Your Intuition

For the week ended September 7th, the S&P 500 Index rose 2.2% to 1,438 (for a year-to-date total return—including price change plus dividends—of about 16.1%), and also reached within 10% of its pre-recessionary record high of 1565 set in late 2007.

Both the Dow (13,307) and the Nasdaq (3136) have also closed at pre-recessionary levels this week. So, do you know what that means? It's time to get out of the stock markets for the rest of this year.

I've always been one who follows my intuitions in both my career and investments, and it's almost never steered me wrong. While I've been bullish since I moved 100% of my investments from cash into stocks near the bottom of the 2008 crash, I feel that the markets have become over-exuberant again and have reached these levels based mainly upon herd mentality behavior.

The contrarian in me says it's time to bail again. So, being the fickle and beautiful woman that she is, I pulled this Jewell of a stock market to the side to explain my feelings to her. To my amazement, she understood my intuitive reasoning and thanked me for the appreciation that I've given her over the past four years, and agreed it was a good idea to part ways. Maybe we'll hook up again in the near future.

So, today I moved my entire IRA, Roth IRA and 529-plan investments into money-market funds. Next week I'll also move my donor-advised fund into cash.

1 comment:

  1. Okay, moved my donor-advised fund into a money-market fund today after Fed announcement of QE3.

    Except for a few select individual stocks that I've been holding long-term, for years, I'm now fully invested in cash.