Lately it’s been hard to find good investment ideas for value investors as the stock market is ripping higher than ever. Large cap companies are making big gains, such as Tesla (TSLA) with a 50% price appreciation over the last week.
It’s not just stocks. Cryptocurrencies are on the rise too, with Bitcoin rising to $90,000 USD for the first time.
The only thing that isn’t following the up trend is the bond market. As people anticipate a better economy, treasury yields go up. And when that happens, bond funds lose value. But anyone with a balanced portfolio should still be doing relatively well.
Market participants are dumping safe assets and hopping onto the risk asset trade because they have a fear of missing out on this Trump rally. But despite the current euphoria in the stock market, there is at least one value investor who is sitting this one out.
Warren Buffett has increased his cash holding to $320 billion, the most ever.
By comparison he only has $272 billion in equity investments. He’s holding more cash than stocks.
One of the most successful investors is not participating in this rally, and is in fact selling into it. Does he know something the rest of us don’t?
Either way, large moves in the market like we’ve seen recently have historically been followed by pullbacks. For shorter term traders, this could present a good opportunity to take advantage of the volatility, maybe taking some profits now. For longer term investor, this is a good reminder that the market will go up and down over time, but that shouldn’t change your buy and hold strategy.
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Random Useless Fact:
This is what muscle fibre looks like under a microscope
Keeping to the strategy you already have in place and holding is probably for the best. Unless something dramatic happens, the market has a tendency to go up over time.
Hi Liquid– you haven’t updated your net worth profile in a couple years — any particular reason why? Also, how is your farmland up by Rhein/Kamsack paying these days?
Hi Jason. The reason I haven’t updated my net worth is because I’ve been lazy. Ever since we had the baby I haven’t been keeping track of my finances very well. I’ll try to do an end of year net worth update.
In terms of the farmland, I have actually sold that for a profit. I took the profits and put the proceeds into other real estate and stock investments. Thanks for the questions. 🙂