Range Bound markets can make your portfolio bleed cash. And with all the unanswered questions looming about what’s next for the economy, it looks like we could be stuck in a range for a while.
Here are 3 reasons I think your best trade is to just sit and wait:
1.) Everybody wants in. The masses are looking for reasons to buy and get in. When the herd gets involved, what seems like the right decision in the short term often ends up the wrong decision for the long term. Bottom line, herds just create more turds.
2.) The rules keep changing. The government keeps modifying the rules of the game. They're trying hard to make sure Wall Street does not revert to its old bad habits.
3.) It's not clear where the best investments are. It is unclear where the best place is to put your money. Do you go with equities, stay in fixed income and commodities, or take a chance on emerging markets. Fight your fear of missing out and wait.
Never Say Never. If the past year and a half has taught us anything, it's that the markets are emotionally charged and can be unpredictable. I'm not saying you should never get back in the market, I'm just saying right now may not be the best time.