Why I Moved Some Retirement Funds to Cash

Written by Nick Hodge
Posted July 24, 2019

I once heard a very good investor say: “Be very careful taking advice from anyone that hasn't successfully navigated a meaningful amount of capital through a bear market.”

We haven’t been through one of those in almost 11 years. 

I’ve been at this desk for over 12 years. My introduction to this space was the worst financial crisis and stock crash since the Great Depression. 

sp500 chartI saw what led up to it. I navigated it in real time — so successfully that I built a multimillion-dollar financial publishing brand on the back of what I did in those years between 2007 and 2009. 

And I just moved a large chunk of my safe retirement funds — the Vanguard index funds — into cash. 

The reasons for this are simple, really. I have just participated in the longest bull market in history with a meaningful amount of capital. And I’m starting to prepare for what inevitably comes next. 

Bear markets follow bull markets. That’s just what happens. 

We are starting to see the rotation. Gerardo has written to you about it. Mr. Dines has written to you about it. And now I’m writing to you about it. 

The financial signs are everywhere from negative global interest rates to the Fed backed into a corner to banks starting to “restructure.” The anecdotal signs are everywhere, too — soaring stocks of companies that lose copious amounts of cash, record prices for art and real estate, creeping laziness and underperformance in the service industries. 

More than anything, perhaps, is the fact that you can see it playing out in front of you. While the S&P 500 and Dow Jones have notched new highs… all they’ve really done is recoup their losses from the selloff that started last September.

In the meantime, money is going into havens in ways we haven’t seen in years. Gold is at a six-year high and showing strength. 

In this era of hyperbole and two-minute attention spans… it’s easy to lose sight of the macro trends. 

Make no mistake: We are at a pivotal point in market history. 

I believe the next three to six months are going to serve as guideposts for what’s to come over the next few years. 

There will be pain for those not paying attention. There will be gain for those who are. 

It’s game on. 

And the complacent attitude that’s set in is about to get a reality check.

Call it like you see it,

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Nick Hodge

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Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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