Cash In, Stocks Out


Could we be at the beginning of the market meltdown that Marc Faber warned about?

Yes, of course. But you never know. Mr Market is a joker. You never know what he’s up to.

It hardly matters. At today’s prices, there is much more risk on the downside than there is reward on the upside. After hitting the highest earnings in decades, what are companies supposed to do next? And with household income still flat or falling, how are they supposed to do it?

Smart readers should be out of stocks. Unless you’ve got a very long-term outlook…and are prepared to ride out this deflationary/bear market cycle (which could take ten years or more)… you should be out of stocks. At least out of US stocks.

But if you’re out of stocks, what are you in?

Bonds? Nope.

Then, what?


‘I keep telling my clients’, said a stockbroker we spoke with, ‘that there’s no shame in holding cash. But they don’t want to hear it. They think you can’t make money in cash. They’re worried about inflation. They just want to be fully invested. But right now… cash is not a bad thing. It might be the best investment they can make.’

Yes, dear reader, there is a time for every purpose under heaven. There’s a time to make money. And there’s a time not to lose it. This is one of those times…when the best you will probably do is not lose money.

And the best way to do that now is to hold cash… You might lose a little upside. More likely, you’ll lose a lot of downside. And then, when the bottom finally comes… say, in 2017… you’ll be prepared to buy.


Bill Bonner
for The Daily Reckoning Australia

From the Archives...

Why Australia’s Economy is No Economic Wonder
16-11-2012 – Greg Canavan

The Ills of Fractional Reserve Banking
15-11-2012 – Nick Hubble

Avoid the Slaughter: Watch This Key Stock Market Pointer
14-10-2012 – Murray Dawes

Molto Moderato
13-10-2012 – Dan Denning

Vote for an Honest Election: Democracy on eBay
12-10-2012 – Bill Bonner

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Bill Bonner

Latest posts by Bill Bonner (see all)


Leave a Reply

Be the First to Comment!

Notify of

Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to