Why I'm Cash Heavy Going into 2020

TL;DR

Investor explains shift to cash-heavy position due to lack of undervalued stocks in the market.

Transcript

well guys what a difference a year makes I remember back to the same exact time last year I was stuffing every dollar I had into the stock market I was buying as many stocks as I could across various various different industries and I believe I even got to a point where I got under my golden rule which my the golden rule is like always keeping at l... Read More

Key Insights

• 🥹 Investor shifted to a cash-heavy position due to the absence of undervalued stocks and significant gains in existing holdings.
• 🧘 Evaluation of portfolio positions reveals reluctance to purchase more shares of stocks with substantial gains.
• 😃 Big tech stocks, such as Apple and Amazon, are noted to be overvalued based on high forward P/E ratios.
• 🥳 Anticipation of market corrections in 2020 due to high S&P 500 P/E ratios and uncertainties surrounding the upcoming presidential election.
• 🤝 Investor emphasizes the importance of waiting for better deals in the stock market before deploying more capital.

Questions & Answers

Q: Why has the investor become more cash-heavy in their investment strategy?

The investor has shifted to a cash-heavy position due to the lack of undervalued stocks in the market and the significant gains in their current portfolio holdings.

Q: How does the investor evaluate their current stock positions?

The investor reviews each stock in their portfolio, considering factors such as percentage gains, potential growth, and position size to determine if additional shares should be purchased.

Q: What concerns does the investor have regarding big tech stocks?

The investor points out the overvaluation of big tech stocks, citing high forward P/E ratios for companies like Apple, Microsoft, Amazon, and Google, which may indicate inflated prices.

Q: What market trends does the investor anticipate for 2020?

The investor anticipates potential market corrections in 2020 due to high S&P 500 P/E ratios, the upcoming presidential election, and the lack of attractive investment opportunities in the current market.

Summary & Key Takeaways

• Investor recalls being heavily invested in stocks last year, but has now shifted to a cash-heavy strategy.

• Discusses reluctance to buy more shares of stocks with significant gains and evaluates current portfolio positions.

• Analyzes overvaluation of big tech stocks and high S&P 500 P/E ratios, indicating the potential for market corrections in 2020.