Happy Fearful Friday in the stock market. A spooky week in the stock market seems fitting right before Halloween. Please refer to our Target Allocations today; I’ve made some significant updates to it.
My view is that if Covid-19 cases continue to escalate, fresh lockdowns return or we get a blue sweep in the election, the stock market (S&P 500) could see another 10% drop from here. If we go down further from here, I’d guess we’d see a much-heavier selloff in high-flying growth and tech names that are trading at over 25x forward gross profit, so we want to keep rotating out of those if you’re in them.
Let’s use some of our cash to add to our positions in a relatively sizable manner on the weakness, but also leave room for more buying. Remember that our target allocations are based on being employed and being able to contribute more with savings, and if you aren’t, make sure to hold a larger cash allocation than the rest of us.
You’ll also notice that I reduced some of our Gold/Bitcoin target allocation. This reflects selling Gold for some cash, not Bitcoin, which should be a long-term hold for 10 years.
This morning, I’ve added mostly to my Value Stocks and long-term Growth Stocks that are reasonably priced and that I truly believe in for the long-haul. For ROI Connect members at acouplecents.com, that means adding to our No. 1 Value Stock Pick (which is now a top holding for me), our top 2-3 favorite Growth Stock Picks that have sold off a bit, and Facebook ($FB) on their weakness.