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Are investors selling to book profits to go all in cash?
#1
I have read on another forum about few folks selling to preserve their profits and beginning to wonder if some retail investors really cashed out of stocks?
 
I used to think retail investors are less than 20% of the market, but not sure if that is still true with most salaried people contributing a lot to their 401k and self managing their investment.
 
I am still of the opinion that this sell off is shorts driven trying to scare the market in a downward direction and make some extra cash, they have tried multiple times in the past 5 years but failed most of the times. They failed in Aug 2015, Jan 2016, Feb/Mar 2018 to name a few.
 
Yes, its late business cycle and the probability of market going higher like 2010-2017 is very low but market going down more than 20% also seems low due to lack of major problems like in 2008 or 2000.
 
I always assume that markets can move +-15% for no apparent reason and I guess we are experiencing such volatility but I am still scratching my head trying to figure out the actual reason.
 
Is the actual reason that a lot of retail investors getting out of equities all at the same time?
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#2
I doubt it's retail investors. I see a lot of institutional money flowing out of my Blackrock and most other asset managers. Just not sure where they are putting their cash, possibly short term notes?
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#3
I don't think it is retail investors. I think it is institutional investors. Why and what they are doing, I can't discern. To me, the fundamentals still look good; full employment, generally good earnings reports and forecasts for 2019. I'm buying now.  GLW today, Watching RTN, V, and $BRKB.  Maybe even T and F as trades.
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#4
November tough month and algorithmic trading is adding volatility. Getting out of this market would be a mistake. Depending on your investment plan I would add to equity side or do nothing until after this year ends. buy a boat and drink cold beer. stay the course
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#5
Only selling to book losses in my brokerage to offset gains already realized. Trying to minimize my tax burden. Suspect that others are also taken this opportunity to "harvest losses".
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#6
At a financial planning conference I attended on Thursday, a speaker from State Street Global Advisors said that it was retail investors who were selling, not institutional sellers. They also opine that this is a correction, not a recession, and recommend buying, as the market has historically gone up after every midterm election, and the third year of the first term of a President has usually been a higher stock market.
 
I think that you are right about tax loss selling, as the market was very high until the correction in February, and again in September, until October.  So, many investors have had significant gains this year.
 
Certainly, there are some concerns about rising rates and tariffs and the midterms, but everyone knew about all of these issues in September, when no one cared.
 
However, the cautious and lowered GUIDANCE given by many companies, even those that met or exceeded earnings expectations, is what is causing fear.  Amzn is an excellent example, as the company which most recently have cautious guidance for the fourth quarter, which is typically the best quarter for retail profits.
 
My guess is that the market is likely to rally after the midterm elections, as the market likes certainty.  Without this distraction, there is likely to be some progress on negotiations with China, even if it is only to delay imposition of tariffs to facilitate negotiations.  If there is a resolution, then potential rate hikes will be less disconcerting for the markets.
 
I was 50% cash at the end of September.  I have been day trading solid companies on the volatility, but have also added stocks I wanted to own, but were too expensive at or near 52 week highs for most of this year.  As of yesterday, I have begun positions in HD, COP, Utx, Key, T, and traded V, Hban and Fcx.  I recently added to M, GM, Oxy, Dis.  Just missed WM, but have a limit order waiting, and hope to buy back V.
 
My guess, buy before the midterms for best profits.  If Santa Claus comes to town, then I will book profits and start laddering CDs after the December rate hikes, as 3% for complete safety is beginning to look good.
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