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Opening Statement from the December 2014 Intelligent Investor (Part 3)

First published on December 9, 2014 for subscribers to the Intelligent Investor

Over the past couple of months we have been advising readers to consider gradually raising cash through a process of selective selling (selling on strength) as we approach the New Year.

We reminded readers this recommendation was not a market forecast but served as a risk management call based on what we have identified as several points of increasing uncertainty. We also acknowledged that more active investors and investors with adequate cash might not elect to embrace this investment strategy.

Although our general recommendation was to raise cash via selective selling, we also discussed that we believed the US stock market had a good deal of upside remaining for 2014.

In the November Market Forecast we stated that we were certain 17,600 would be reached. Next, we attached a 75% chance of the Dow Jones reaching 17,800. We even discussed that 18,000 was possible.

Furthermore, we emphasized that if the 18,000 region was reached investors should really be trimming aggressively if in fact they elected (or needed) to sell in order to raise cash to position the portfolio adequately for future opportunities as well as creating a better atmosphere for restful sleep through the holiday period.

We also reminded readers that