Moved more to cash again this morningOne of my son's has gone from fully invested in one account to 60% cash as he is getting ready to buy a house. Another son has gone from 35% margin to 25% cash. I have gone from 20% margin to 15% cash. .
It feels to me like Powell has been prepping the market for the past couple of months for today's announcement.
I'm not a big fan of Jim Cramer as his job is entertainment, but sometimes he makes comments that I'm forced to consider. If you have a few minutes, check out what he had to say on Mad Money last night: https://www.youtube.com/watch?v=wkkOuhx1_6E
Basically, Cramer is saying the only bullet that the FED has in its gun to fight inflation is to crush the buying power of investors. I hope Cramer is wrong, but I'm not seeing any viable alternatives and Powell has been very clear with his intention to wrestle inflation back down to 2%.
Unlike the FED's response to a market meltdown in December 2018 where the FED reversed its direction on raising interest rates further, this time around Powell has made it clear that people will get hurt but the short term pain is worth it. When the FED chairman tells us what he is going to do, perhaps we should listen.
I hate being out of the market as cash burns a hole in my proverbial investment pocket. However, today feels like it could be a landmark day. If Powell puts the hammer down, I would have been smarter to go 100% cash. I just can't make myself sell off too much SU or TSLA as I treat them like a house or a private business. They may drop in price for awhile at which time I will use the recently raised cash to buy back in. I can't get that "if you missed the 8 best days" article out of my mind.
If Powell delivers a dove-ish message, then I will jump back in. I'm betting that he remains at least as hawk-ish as his recent statements or perhaps even more so.
The fact that retail investors can move large amounts of money for $9.99 per trade (or less depending upon what platform you use) in liquid markets is perhaps the biggest benefit of modern day investing. Young investors probably view the ability as a given, but for someone like me, it is a huge win as it allows anyone to move to the sidelines in a heartbeat. There is really no excuse (other than the timing of tax liability) to stay invested when you are nervous.