Noah Didn't Wait Until it Started Raining to Build an Ark

It's been a great run if you've been in stocks since 3/09. I use that 3/09 date
because that's the date where my relative strength of stocks vs. moneymarket
turned to favoring stocks.

If you took that signal you're up over 60 percent in the S & P alone.

The big question is 'what are you going to do now?' I'm  not saying that we're not going to continue up.

I don' t make those kind of predictions.

What I am saying is that you have to be prepared in case stocks start down.

I know what happens. I've been there, done that. You're feeling good about yourself and your financial advisor. Your both feeling pretty smart right now. But what's your plan?

To give you an example of my plan -- and it's MY PLAN and the plan I use for my clients, it might not be for you -- I am watching the S & P chart. At current levels, if it declines to 1285 it will be the first sell signal in the chart of the S & P since 12/2011.

If it does hit 1285 I will move approximately 25 percent of my clients money out of stocks and into moneymarket.

At that point I will see how it plays out. My main indicator that compares
relative strength of stocks bonds and cash remains on a buy signal for stocks, so
until there is a change in that indicator I will stay over-weighted in  stocks.

It's all about capital preservation and I would be taking the 25 percent off to protect that capital.

On the other hand for those that have been sitting in cash/moneymarket since 2008, this is a good time to start putting some of that money back in the market.

At current levels you could start putting back into the S & P (an index fund preferably); like 25 percent. If the S & P drops below let's say 1280 you could just move it back to cash. If it continues up you at least have some invested.

The point of this post is to get you to start thinking about what to do NOW.

Sort of like Noah didn't wait until it started raining to build an ark.