Tactical Or Buy And Hold?

Stocks are about 9% off of their highs and down a little over 2.5% on the year (ACWI ETF converted to $C). If you bought stocks after October 2017, you are offside. Bonds are down too, the Canadian Bond Index ETF (XBB) is lower (year to date) by about 1.7%.

A fully invested 60% equity, 40% fixed income portfolio, based on those two ETF's is lower by a little over 2% so far this year. 

With an increased allocation of cash of 20-30%, you likely could have saved about .50% or about $2,500 on a $500,000 portfolio since January 1.

Dennis Gartman, long-time market commentator and trader suggested on BNN that market tops are made of volatile moves as those we have seen over the last couple of weeks and that we may have begun a bear market (in stocks).

Prominent economist Mohamed El-Erian suggests that it is unsettling and that as I suggested above that diversification is not working. However, he does say that it could put markets on a firmer footing: 

"Although it is painful in the short-term, this correction could underpin healthier markets in the longer term. It reminds participants of the importance of respecting, and better pricing, volatility and liquidity. And, with improving actual and prospective growth, the sell-off can be part of a transition from liquidity-driven valuations to ones built on better economic and corporate conditions, thereby narrowing the gap between elevated asset prices and fundamentals -- and the concern for future financial stability that comes with such a gap. "

More here: https://www.bloomberg.com/view/articles/2018-02-09/10-things-to-know-about-the-stock-market-selloff

What I know is that stocks got a lot cheaper relative to earnings and that is a key fundamental that we (at High Rock) have been monitoring for sometime: VALUE

And another thing that I know is that I would rather have cash in my portfolio so that I can grab some bargains when I see them. So I do. So do Paul and Bianca. So do all of our clients, because we manage our personal money in exactly the same way as we manage our client's money.

We manage risk first. When risk is high, we accumulate cash. We do not chase returns. When prices come down to more reasonable levels we look for value.

Is there better value now? Certainly, at least by the above chart it has not been this good since 2016. Will values get better? Maybe. But it sure is nice to have options for buying into better value. 

If you have a fully invested buy and hold strategy you are going to just have to sit and wait it out.

What kind of work is a buy and hold strategy advisor doing at this time? Not looking for bargains. Perhaps advising his / her clients to "sit tight". Very strategic!