Having either too much cash or having too little cash by being fully invested both have different risks.
Many investors refused to see a possible market correction and remain fully invested in equities.The risk they face now is the possibility the equity market will retest its recent low and fall further from current levels. If you are fully invested in equities there is no place to hide.
There are two options you can pursue if are fully invested as follows:
Make some equity switches from poorer quality companies to better quality, less leveraged ones.
Take some profits in some stocks and equity sectors that have recently seen a nice market rebound.
For those of you with too much cash the risk is that you may have already missed the market bottom and this involves an opportunity cost.
There are several options you can follow if you have too much cash as follows:
You can gradually phase back into equities by purchasing high quality stocks that have come down in value recently.
You can systematically invest a percentage of your assets back into equities – say 10-20% at a time.