We're seven years into a thinning recovery, bonds are returning negatives, stocks are overpriced by most valuations and the global economy is shaky. And did I mention George Soros is back trading?
So what to do? I'm at my normal 60/40 equities and fixed income, with 40% of my equities outside the U.S. (and half of those in emerging markets). About a third of my equities are individual stocks, including the 1% remaining of Peabody Coal, my biggest single loss ever.
I agonize over a move to 50/50, an allocation I've never done. I spent my first twenty years investing in at least 80% equities.
So I roam through my holdings, ignoring the market noise. I trust the U.S. to continue to make money and return it to its stockholders. That includes my Wells Fargo, IBM, Charles Schwab, Ford, Cummins and even Seagate holdings. I trust the rest of the world won't implode - sans maybe China - mostly trusting my stocks in Mexico, Japan, France, Israel, Spain, Indonesia and around the world.
I'm fine with my REITs and my handful of Krugerrands. Bonds make me nervous, but they're spread around the world, in both governments and corporations. And I'm getting used to the 3-4% returns, unfortunately.
So I'm staying the course. I might clean out a few stocks that are getting a little pricey. And I'll probably let any sales sit in cash while I ride another bumpy stretch.
And if the market jumps another 20-30%, I'll be doing some selling. And if it drops 20-30%, some buying.
Which is about what I've done forever.