Zilos Capital Issues Short Term Cautionary Guidance on Stocks

One of the biggest mistakes investors make is watching a winning position turn into a loser; regardless of time horizon.

There simply is not logical explanation for this. Especially with stocks.

Why?

Because the investor can exit a down-trending position and re-enter when the conditions are more favorable. In fact, even assuming highly imperfect timing, this can yield even greater returns than an indefinite buy and hold strategy.

Keep in mind. Bear markets can last for months, and sometimes over a year.

Today, keeping in mind one of our most treasured investment principles, Cycle Capital Rate (CCR); we “booked” profits, closing 80% of our long positions in stocks. For the remainder we continue to watch them daily as various market factors continue to materialize.

Closing profitable positions yields several benefits:

• Protecting and ensuring profitability.
• Mitigating time risk and he impact of systemic risk.
• Staying liquid for new opportunities that abound when markets correct.

Stocks have been no a great run for quite some time now, and we must respect Newton’s Law, “What goes up, must come down”. Especially when factoring in news that several large global economies are showing signs of recession.

For these reasons we are issuing cautionary short-term guidance for investors, and are heeding that ourselves.

Remember: There is never any logical reason to let a winner turn into a loser in stocks. One can always exit and re-enter under more favorable conditions.

Blessings.