I’m currently at around 50% cash/short-term gov’t bonds (and comparatively thin slice of i-bonds up to limit) and 50% equity. While I fondled the idea of selling out in Dec 2021 before a long trip, I didn’t and at today’s levels, (IMHO) it no longer makes much sense, and is (currently) generating a reasonable level of income which is generally enrolled in DRIP’s (which I can rationalize as leveraging dollar cost averaging to assuage my damaged ego).
I’ve started nibbling a bit, but will probably deploy a heftier chunk when I feel the market is in true despair.
Back a year or so ago Wendy and others were pounding the gong about the market being overvalued, which I believe it clearly was. My comment then is the same as my thoughts now: A high valuation implies lower future rates of return. Turns out, my rate of return over the past two years is pretty close to zero, which is what I was expecting. But it is like 40% over the past 5 years, so I’m pretty contented. My investing horizon is like 30+ years, so two flat years doesn’t mean much.
Most of the market returns occur on a small number of days. Back at the last major market bottom in March 2009, the headlines were grim, and just kept getting grimmer for months. I personally feel is it is very risky going to cash and trying to find the absolute bottom.