Don't Need Stocks? Don't Own 'Em
Posted at 6:30 a.m., Feb. 27, 2009
Fall back. Fall back to basic principles. What do people
to do whether they want to do it or not? What do governments have to pay for whether they want something or not? What must be used whether you like it or not?
That's where we are right now in the helter-skelter pell-mell race to take all stocks to single digits as the notion of a worldwide global depression sinks in.
So many of you -- some incessantly, for heaven's sakes already -- have asked me, "Why bother?" or "Why not sell everything?" or "What's the point?" To which I say, patiently, and endlessly, and I'm on record on this, that if you need money for anything important, take it the heck out of the stock market.
As far as I can tell, I am the only one who has said, "Get it out of the stock market," and judging by the firestorm with which it was received -- including a national ad campaign against me -- I can see why people don't do it.
I am reiterating again that it is right. You need that money in the next four-and-a-half years? Go. Sell some. Maybe we get a lift, sell more. We don't get a lift, sell anyway. The market's horrible.
But there is such a thing as asset allocation. You can have 100% of your money in cash, and that's been terrific. For now. You can have lots of shorts on, that's terrific too. For now. You can own some stock and have lots of other assets, like gold and Treasuries and municipals, and that's also fabulous. For now.
The main thing for the stock portion of your portfolio, if there is one, is to think and remember what people have to do to exist. Think also what governments have to do to exist and, if you have to own stocks -- and maybe you don't (so stop reading here) -- you have a better chance of buying a survivor than not.