As many of you know, I am a believer in active asset mix strategies to enhance portfolio returns.
However, I am not a proponent of either being fully invested at all times or being mainly in cash waiting forever for a market correction.
Being fully invested does not provide you with an opportunity to take advantage of market opportunities when they present themselves.
Being mainly in cash provides little upside and results in a material decline in your purchasing power in a rising inflationary period like we have now.
While it is difficult to predict a short term equity market correction of 5-10% that can occur at any time, it is much easier to foresee an upcoming economic recession where markets can fall as much as 50%. Every month I review economic stats to determine the probability of an economic recession.
Currently these economic stats do not point to a recession at this time. Consequently I continue to advise a proper allocation to equities to participate in the growth in equity prices.