CASH (CASH)

He's pretty close to 25% cash right now in his conservative platform, and that's high for him. Why? Because there's a lot of overvalued stuff out there in the market, and he's worried. He's not selling purposely to raise cash. But if he takes profits, he just doesn't want to reinvest yet. 

There will come a time to redeploy that cash. Though July can be a good month, August and September not so much. So maybe in the next 2-3 months there will be an opportunity. Something can be a buying opportunity, but not if you don't have the cash ready.

Still owns it but a lot less, as he's gone more into equities and tax-favourable coupon bonds. Still a very compelling offering. At this moment, instruments are yielding slightly over 5%, though the rate moves around.

Sitting tight and not buying. He expects a 4-5% pullback short term.

Interest classified as income on this product - therefore taxable. Not a significant premium, but very safe option. Good overall. 

Rate of return may have come down slightly since then. Chose it because of high chance of recession. You got 5%, risk free, with high level of optionality, beautiful. It's a gift that we didn't have for 30 years. With chances of soft landing increasing, much of this cash has been deployed into equities and coupon bonds.

In a 70/30 portfolio, he's about 76% equities right now, as the market's had a fabulous run. But trees don't grow to the sky, so he wouldn't be surprised by a pullback in equities. The rest of this money will be available to deploy when that happens.

It was a non-earning asset for over a decade, but not now. The only risk is in reinvesting say, a GIC--where to put that money. He chooses bonds and has been reducing cash for clients from over 10% to much lower. Likes US 10-year treasuries paying nearly 5%, a gift. Rates will decline going forward, but not to 0. 3.5-4% is the target.

He made 4% in a time when the market declined 4% just by holding cash. He hold 27-30% cash, which is high. His historic high is 40%.

The S&P got overbought, led by the big 7 megatech stocks. Add to that seasonality when September is historically weak. He's holding 21% cash, but that will likely change in a few weeks if markets fall. He thinks the S&P can fall back to 4,200-4,300.

Cash is good. Cash makes sense.  If you don't like the market or don't like any stocks, then sell stocks and raise cash. This will protect you against a lousy market. Cash is for losers? Ridiculous.

The breadth and sentiment of the market is not great. He still holds cash to use if last week's correction results in a further small  pullback.

Lid on the S&P 500 is 4200 right now, and it hasn't cracked it since last year. He sold his S&P index when it got close. He's heavy into cash, around 33%. Beyond those 6 magic stocks on the NASDAQ, the broad picture shows that most stocks are going down. 

The TSX has a bit of upside potential to just over 20,000 for a trade, but how much will it take to get through that? Certainly the Canadian banks haven't reported wonderfully lately. 

He's in cautious mode. He'll wait and see what happens.

This is the start of a broader decline. If you must be in the market, maybe go into big tech, which lacks balance sheet and lending concerns, but there will be growth concerns. He isn't buying anything at all, but is preserving capital. Cash.

Be careful going into to cash, because you could miss the timing when it's actually better to be in stocks. He doesn't advocate raising cash.

The January rally was due to multiple expansion and add FOMO. The brunt of Fed activity (rate hikes) has yet to be felt. The market now is a good reset. There is an insatiable appetite to buy stocks, but it's better to be in cash, because the second half of 2023 will be miserable when we see the impact of these hikes. The risk now is to the downside.