Q: Hi Peter and Associates,
I hear some talk of tax selling as early as August? Some professionals speak of setting up their portfolios to avoid and/or to take advantage of year end tax selling pressures? Some sectors and/or specific stocks have seen modest to significant declines this year and risk seeing above average volumes of yearend tax loss selling?
Many experts do not suggest trying to time the market but also talk of good entry points to initiate a position if not starting with partial ones to begin. Then there are those who factor in seasonality or other technical indicators. Without wanting to sound pessimistic, more than a few guests on business programs express caution, have increased cash weighting to have dry powder in reserve.Markets are not seen as cheap but opinions vary as what to do?
Bottom line, market corrections are part of reality and one has not occurred in some time? What percentage cash might be viewed as a reasonable cushion for a middle of the road risk investor with a 65/35 (Equity/ Fixed Income) objective who would prefer to reduce equity exposure by building up some cash reserves at this time? What suggestions might you have in response to the above and specifically, what reduction in equity exposure might be reasonable and/or sufficient to have substance? Assume a 5% weight in gold forms part of the overall strategy and a sufficiently large portfolio to provide diversification and no over weightings within it.
Fundamentally, are there any specific strategies an investor might use or at least consider in the last months of any year and more specifically this year?
Thank you.
Mike
I hear some talk of tax selling as early as August? Some professionals speak of setting up their portfolios to avoid and/or to take advantage of year end tax selling pressures? Some sectors and/or specific stocks have seen modest to significant declines this year and risk seeing above average volumes of yearend tax loss selling?
Many experts do not suggest trying to time the market but also talk of good entry points to initiate a position if not starting with partial ones to begin. Then there are those who factor in seasonality or other technical indicators. Without wanting to sound pessimistic, more than a few guests on business programs express caution, have increased cash weighting to have dry powder in reserve.Markets are not seen as cheap but opinions vary as what to do?
Bottom line, market corrections are part of reality and one has not occurred in some time? What percentage cash might be viewed as a reasonable cushion for a middle of the road risk investor with a 65/35 (Equity/ Fixed Income) objective who would prefer to reduce equity exposure by building up some cash reserves at this time? What suggestions might you have in response to the above and specifically, what reduction in equity exposure might be reasonable and/or sufficient to have substance? Assume a 5% weight in gold forms part of the overall strategy and a sufficiently large portfolio to provide diversification and no over weightings within it.
Fundamentally, are there any specific strategies an investor might use or at least consider in the last months of any year and more specifically this year?
Thank you.
Mike
