No. of Recommendations: 2
In support of Dave's response, I try to look at my portfolio/assets from the standpoint of both an "income sheet" and a "balance sheet" basis.

For the past few months, similar to the first nine months of 2018, there was an emphasis on the accumulation of stocks by many on the basis of the "bigger fool" argument (that there will always be a bigger fool than you are willing to pay you more than you did for a share of stock. Now, don't get me wrong, there are many stocks which deserve to be sold at a higher price than they currently (whenever that is) trade at, but the are times when that group shrinks. When the equity market is rising faster than the economy's growth rate, this phenomenon is nearly unavoidable and a "correction" (regression back towards, or even past, the mean) is expected.

While there are technical analysts who plot all sorts of stock patterns looking for these inflection points, to be frank, I never understood much of that mumbo-jumbo. There are other clues which I'm more comfortable with such as currency cross-valuation changes and interest rate shifts.

During these downdraft periods, nearly all equities can drop simultaneously, but generally large-cap issues like Dave is holding drop less than high-flyers which distribute no dividends and which may not be as financially stable as the blue chips. So, while Dave's balance sheet will suffer, in general, his income sheet will remain stable - while those who own the small-cap high-flyers will lose capital, while there is no compensatory income.

True, well run companies from both groups will tend to recover over time (around every decade +/-, a longish time), there is more likelihood that the small-cap guys might get "broken" and permanently burn your money than the other group (which, of course, has the added advantage of paying you "rent" to own them).

Long story made short, the high-flying group has done very well since the beginning of the year, but my concern about the sustainability of the market (as opposed to the companies) has caused me to pick up those marbles from the game (as well as some non-dividend paying big-guys) and stick with boring old grandma type stocks (if that were a Japanese/Chinese/European grandma, that is :-).

The bottom may not fall out for a number of months (or not at all), but a Benny saved is a Benny urned (old elementary school joke) and I'd rather pay income tax than take tax write offs when I sell. There will always be an opportunity to buy stock in the future when I decide to re-expand my portfolio (hopefully at lower prices than things are selling at today).

What the heck - it's a bet at the table, so who knows :-)

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