If we are going to have a recession – then the market will swoon. Period. If you believe that there is more potential good news than bad over the next year, then rebalance by all means….
If you believe that the housing market has just begun to have an impact on the economy, and if you believe that the party is over for profits in the large caps (as the economy cools, the profits will shrink), the p/e’s get higher, the market dips and stays down for a while. Then get out….
You can always buy after a couple of thousand points get shaved…
p.s. The DOW was between 8K and 10K in 2003…. That was a period of intense earnings… Why do you think it couldn’t go back to 10K… 9K… 8K????
