Well we have been flirting with our exit point for three months and it finally got there.
At the close of the Market we reached it. Shopping numbers were disappointing and it looks like this may be the worst Christmas season in years.
As you have instructed me and as we have agreed, we will be going into our defensive strategy which is 50% cash and 50% ultra short term bonds tomorrow.
For those of you that have money that is not directly managed by me (401(k) etc. you will need to move those to the money Market or stable value funds yourself.
Keep in mind that when the Market reaches our exit point, the odds are 83% that we have a bear Market on our hands. These are odds that we cannot ignore. There will be taxes due on your non IRA accounts, but as we have discussed it is better to pay taxes, it means you have a profit, then to stay in and lose your profit and principal.
If the Market bounces back and reaches our buy point, we will get back in. The average time out is 9 months. There have been 2 times in the last 78 years when it was only 11 days. How long this one will be, we will have to wait and see.
Thank you for trusting us during these times and hopefully this storm will pass soon.