When I started my career in 1996 with Dean Witter, I sat in a four-pack with three other trainees. For many reasons — most of which had nothing to do with the actual work — that year was the most fun I’ve ever had at work. I also had the opportunity to sit across from a seasoned advisor who bestowed upon me his years of wisdom. One nugget in particular shaped my career more than he could have imagined.
CASH IS KING. Did he mean always be invested in cash? No. He meant when markets begin to correct, the wisest investors have a predetermined amount in cash. First, cash is the best way to limit large losses as it doesn’t fall with the market. And secondly, that cash shouldn’t come from selling stocks that have already fallen with the market, or you’re really not buying new stocks at fire sale prices. Thank you D.H.
WHAT’S ANIE SAYING? The market dropped again on Friday to 2,475 as buyers bailed (Mohamed El-Erian, https://lnkd.in/gRne_eg). Buyers need to hold this Equilibrium to build support. If not, the make-or-break 2,300 Equilibrium may be in the cards.
