Here’s a question I received recently, which rhymes with many I’ve heard before:
Now that the Dow has hit 20,000, we should seriously get out and put the cash under the mattress … don’t you think?
This time it was the Dow’s recent high-water mark. In the past, it’s been the same question in various forms, all of which could be rephrased to this question behind the question: Should the all-time nominal stock market highs be used as some sort of signal to reduce equity holdings? Or conversely, should it be used as a rationale for holding onto cash balances or deferring new equity purchases (which, in my experience, is an even more common form of market-timing)?