Quick update 1st Oct, Markets are looking choppy and US futures are continuing their descent. When the $NSDQ100 dropped to around 14700 during the middle of last week I opened a number of additional buy positions in many US tech stocks, which had dropped around 10% or more, reducing my available eToro cash balance to less than 1%. It looks like these positions will not rebound immediately based on the evidence of the past few days.
So, as I generally like to maintain a cash balance of around 20% to capitalize on market swings I have closed out a number of profitable positions in $UK100 companies this afternoon.
At times like these cash is king and being able to make purchases at good entry points can generate solid near term returns.
I am hoping that global markets return to their upward trajectory soon but there is a lot of fear in play at the moment so I believe it is prudent to take some protective action. Corrections like this are nothing to worry about and without them markets cannot continue to rise. We simply need to manage our risk and not over think short term movements.