Why I'm Warning on Stocks – Keep Your Powder Dry

The Dow fell for its seventh straight day Friday and the S&P 500 (NYSEArca: SPY) was testing its 200-day moving average. Stocks are at high risk now due to the building anticipation and anxiety about the detrimental impact of imminent interest rate hikes and an increasing cost of capital for corporations. Stocks, in my opinion, are showing signs of a potential market correction and they are well overdue for one. However, when stock prices decline precipitously they open up special buying opportunities for long-term investors. For as long as the economy justifies tighter monetary policy, stocks can relatively quickly recover any lost ground on a correction. As a result, I’m suggesting investors go to at least 20% cash in preparation for a new buying opportunity when/if stocks correct over the next 1 to 3 months. See the full warning report on stocks here. Article interests SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA), PowerShares QQQ (Nasdaq: QQQ), iPath S&P 500 VIX (NYSE: VXX), iShares Russell 2000 (NYSE: IWM).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.