Ask Colin

Why are you only 75% invested at present? (February 2016)

The detailed question was:

Ive noticed that even though your plan calls for 100% investment in the market currently, you have been in some degree of cash for quite sometime. My question is, is that because there haven't been any compelling opportunities to buy, or is it because you have been waiting for the market to become less volatile, or perhaps fall (as it has). If it is the latter are there any specific rules you have in place to manage this?

I was 100% invested, as I would like to be in a bull market, but was stopped out of several stocks: mainly Lendlease Group in September 2015, Credit Corp Group in October 2015 and Collection House in December 2015, so I do not consider that I have not been in cash for long, though. I am happy to sit with the cash reserve rather than go back into the LICs at this time.

 

I am looking to reinvest the cash holding and am doing my research, but have not found compelling stocks to buy yet. We are in the reporting season and that may throw up some opportunities.


I am not finding the market overly volatile. These have only been 5 days with a daily ATR greater than 2.5% since January 2015. Four of them were last August-September and one last week. I never take the word of uninformed commentators and check the evidence for myself.

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