TLDR; Today I converted 20% of my position in the S&P 500…
19 reactions
TLDR; Today I converted 20% of my position in the S&P 500 to cash. I plan to continue to reduce my position size, potentially to zero, but the timing is not clear.
Rationale:
- S&P500 at essentially all time high.
- The S&P500 has been the beneficiary of inflation, low interest rates, high employment and passive investing (employees contributing to their 401k on autopilot)
- Inflation is fought with high interest rates (bad for S&P500, bad for bonds, good for cash). That said I'm not convinced the US has the courage to raise interest rates, in the meantime the market is doing the job for them.
- A.I. is replacing white collar employees and is expected to continue (see Anthropic LLM impact chart below). White collar employees contribute the majority of passive investing dollars to 401k -> S&P 500.
- Discretionary income for the consumer is bad and high energy prices make it worse.
- Boomers switch from passive investing to selling S&P 500 for retirement.
- SpaceX and Anthropic IPOs could drain liquidity from the broader market.
- Cash is king during uncertainty.
Rationale:
- S&P500 at essentially all time high.
- The S&P500 has been the beneficiary of inflation, low interest rates, high employment and passive investing (employees contributing to their 401k on autopilot)
- Inflation is fought with high interest rates (bad for S&P500, bad for bonds, good for cash). That said I'm not convinced the US has the courage to raise interest rates, in the meantime the market is doing the job for them.
- A.I. is replacing white collar employees and is expected to continue (see Anthropic LLM impact chart below). White collar employees contribute the majority of passive investing dollars to 401k -> S&P 500.
- Discretionary income for the consumer is bad and high energy prices make it worse.
- Boomers switch from passive investing to selling S&P 500 for retirement.
- SpaceX and Anthropic IPOs could drain liquidity from the broader market.
- Cash is king during uncertainty.
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| 135,000 mlx | |
| 69 | |
| 19 |
