WHAT TO DO NOW: After a sharp reversal lower yesterday, the market is suffering a selling storm today with most major indexes down 2%+ and growth stocks remaining very weak, including another chunk that are giving up the ghost. We’re going to sell our half-sized stake in Robinhood (HOOD) and put the ProShares Ultra Russell 2000 Fund (UWM) on hold. That will bring our cash position to 60%.
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The major indexes are all lower this morning with the S&P 500 down 2.5% and the Nasdaq down 2.9% as growth stocks remain weak.
Thankfully, we came in today and this week with a 54% cash position in the model portfolio so we’re not anxious to sell wholesale at this point. However, as always, we’re also not going to hold, especially as growth stocks continue to unwind.
In the portfolio, we’re going to sell our half-sized position in Robinhood (HOOD), which is knifing below support today and is showing us our biggest loss. We’ll also place our position in the ProShares Ultra Russell 2000 Fund (UWM) on hold given that the broad market is now being caught up in the selling. SELL HOOD
Today will bring our cash position up to 60%, which we are comfortable holding onto given the horrid recent action in growth stocks. That said, we do remain flexible as the fear level is up meaningfully and as earning season continues next week with tons of names reporting.
Don’t hesitate to email me directly at mike@cabotwealth.com with any questions.
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