This is Not a Panic Sell

A couple of weeks ago, I talked about going a bit more to cash.

Today, I reduced my exposure to the stock market by 15% more. I am sitting 15% more in cash.

I think I’ve seen enough for a bit. This morning, the Bank of Canada dropped their interest rates for the third straight meeting. It was 5.0% a few months ago and now stands at 4.25%.

The US Federal Reserve is expected to drop its interest rates later this month. Everyone expects it, as Powell basically said it was time to pivot in his last speech. The Fed certainly telegraphs its moves well in advance.

I think the banks (as proxies for the governments) are a bit scared. They might have held the brakes too long and now the car is almost stopped. They don’t want the car to stop. They want it to slow down but not stop. I think it’s too late for that. We missed the chance to cut rates a few months ago so that the car could slow down and not stop.

In Canada, unemployment is undoubtedly rising. Condo prices are on the edge of a cliff, waiting to fall. Sales of condos have almost stopped, in fact. And people realize they don’t want to live in a condo.

In the US, coming up to an important election, is not much better. Unemployment is rising. Condo prices (in a place like Florida) have dropped by a lot, and homeowners are getting wiped out. As Florida condos get their safety checks and the condo owners get multi-hundred thousand dollar repair bills, they’re forced to sell. Insurers refuse to insure those houses on the coast (Florida and California)!

All this to say, it’s time to push some cash on the side. I’m still *mostly* invested in the market, but not fully invested.

As I said before, I’ll not buy stocks for a while. And in fact, I’ll be able to last a few years without having to touch them again.