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As a retired guy who still has significant stock investments, I was clobbered like many others when it tanked in March. Frustrating and a little scary for sure. While I am no one`s investment advisor and have no bona fides, despite the technology stocks going through the roof, I am still slightly down for the year, close to even essentially.
This week was my most profitable in decades despite the market being relatively flat as the inevitable market rotation may finally be at hand. I basically am 100% out of technology and always 90% Berkshire Hathaway ( which owns 6% of Apple but significant banking and energy exposure among its operating businesses) but the other 10% are in SP index stocks (which contain high technology components) and banking stocks, especially Bank of NY Mellon and Bank of America.
My bet is that technology is wildly overvalued and as the economy slowly comes back over the next 24 months, the beaten down financial and energy sectors will become the big winners. Even as they have suffered hits to share prices, the dividends have remained solid in the best companies. (Exxon is my top pick in energy although I do not own it except in the VOO index fund) .
Just my humble thoughts. What do those of you think who hate cash as an investment (Berkshire is almost 30% in cash for me) as I do and always remain close to fully invested despite age? Or am I that much of an outlier?
One big time caveat. If the unthinkable happens and Biden wins, I will be seeking advice from people much more savvy than I.
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ZIRP = Stocks only game in town
Foreign and US economies screwed up but a lot of cash on hand = equity pump
AI at work erasing losses daily – applied to small volume trades from retail group.
Trump is clearly juicing economy by extending covid relief.
Nothing bad likely to happen until Powell pulls the plug on ZIRP
Potential for a big runup on stocks hardest hit which still compose 25% of market.
Effect of daily covid cases now declining
Vaccine = huge runup. (not going to happen)
Disclaimer I am not an expert on anything.
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Neo beat me to it. Stocks are all there is in this environment. Sitting in cash is agreeing to be inflated out of your wealth. The usd is down about 10 percent since March.
Berkshire can sit on a bunch of cash because they are able to acquire at a discount to everybody else. It is their strategic super power. So, holding that cash gives them the ability to make outsize gains on M&A vs most of the rest of the world.
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Sic transit gloria mundi (so shut up and get back to work)
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