By Bill Donoghue, MarketWatch
It has been a good week for stock funds to rally before selling and going to cash. I hope that worked out well for you, but if you followed our advice, you enjoyed realizing most of your portfolio profits as long-term capital gains and possibly enjoyed a final surge as well.
You should be heavily if not totally in cash by now. As you can see, the momentum of health-care stocks, the former leaders, is slackening.
This coming month will see the anniversary of the 1987 Crash (remember, 1987 was still an up year despite the crash), and the Fed considering ending the low-interest-rate policy and allowing interest rates to rise. Remember — the usual pattern in such times is new shorter-maturity debt rates rise increasing money-fund yields, and as the rate rise begins to include intermediate-term and longer-term bonds, substantial losses (especially in bond funds over individual bonds) that may never be reversed in your lifetime.