Those people heavy in cash in anticipation of a recession will look brilliant in a few months, just as Roubini looks brilliant today while for months he was called a doom and gloomer, an Eyeore, etc. I am done following the Wall Street dogma; blindly following the idea of dollar cost averaging is a sure way to underperform. So is buying and holding real estate.
If you are suggesting that people should stay invested in stocks and bonds for the long run and dollar cost average, then I heartily disagree with you.
Anyone who is in cash when the stock markets nosedive going into the recession will be very happy. If the dollar loses more value, those in euros and gold will be happy too.
Also, I wouldn’t guarantee the average investor successful if he’s got his money in the stock market right now. THe stock market is going down as we head into the recession. Being in cash earning 5% is the best place to be.
Anybody who is in the stock market needs to have a darn good reason for it. If you are on this forum, you understand the housing bubble,a nd that every housing decline has led to a recession. GDP is slowing, and the recession is imminent.
Now the question is the same as I asked people in 1999: how will you know when to get out of the market? If you can ride it to the top and then get out before it drops, you will have done better than I. (“I” is correct grammar here)