Stocks are Quite Overextended, but…
Given this short-term uncertainty, a logical question arises: “how much of my portfolio should I keep in cash?” This is an excellent question and one that can be informed by some mathematical evaluation. I say “informed” because mathematical models cannot precisely predict the future. They can, however, help guide our decision-making. Today I am going to discuss how I view the cash vs. stocks decision. I’m going to leave out the discussion of gold (for now). The benefit of this article to you should be to give you some ideas of a general framework you can use to shape your own decision-making.