A very informative discussion going on. My two cents on the same.
- I do agree with Donald that we should keep ourselves in atleast 20% cash in case of any unforseen correction.
- From the early days after the Nov 16 crash , first to recover and rally were the good quality stocks , followed by the cyclical names which were benefitted from the uptick in business cycle and reduced interest rates. Now there is lot of talk around the commodity dominated stocks, and one can c them moving quite a bit. All in all stocks are displaying a trend of moving from underownership to overownership. Anything which is overowned might not find new buyers and hence there risk adjusted returns might not be good.
- Election years have been volatile but if one looks at all the years before the elections , they have been net positive years for the market. So we need to be patient for corrections , lap up the stocks we have decided to buy.
- My personal strategy would be to trade volatility , and slowly by the end of 2018 come down to cash levels of 50-60 % and then wait on sidelines.