Not too long ago, I am fully vested in stocks with little to no cash position. When the market is bullish, It's great. However, whenever the market is bearish I'll be groaning over the losses.
Learning to maintain a cash position of about 10% has always been taught to me and I've always ignored and feel the pain when the market turned bearish.
To give an analogy is to liken investing to driving. Having a cash position is like having a reverse gear, if one can only drive forward in hope of a bull market, when the market retreats we find ourselves with no further alternatives to manuover. Having a cash position allows one to further exploit the low prices to buy in.
What do you think?
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