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I am looking at re-balancing my portfolio. You have been advocating closing out old high return positions like RIO (+95%) and PBR (+70%) and building cash reserves. I am currently at 17% cash, closing out my older positions and holding as cash would bring me to 36% cash. What is a good target.

There is no perfect number for everyone. A lot of it depends on how much risk you want to take off the table by closing out (and ensuring) those gains and also in how much cash you want available for when the next downturn is underway. But I'd say to have way more than you'd normally ever consider having, when it comes to cash. So it probably wouldn't hurt to have at least 36% cash levels, if you're comfortable with that.

And by the way...congrats on those really nice gains.


I really appreciate your guidance. I wouldn't have those gains without you. We've gone through a couple of nasty market downturns (2000, 2008) and listened to the buy and hold philosophy, it took years to recover. We found ourselves unemployed 7 years ago; lost the house and consumed our savings but were able to leave our retirement funds in place. We'll sit the next one out if we can.


You're welcome. I'm glad I've been able to be of help to you.