Even though the S&P 500 Index could rise 20% from today’s levels over the next year, and there are many under-priced stocks in out-of-favor industries and sectors, A 90% cash portfolio might be prudent, with the cash reinvested in short-term interest paying accounts, will outperform a traditional 60% stock/ 40% bond portfolio over the next decade, due to the historically high current valuations of the broad stock and bond markets.
2016 has seen the end of an investment era that existed from 2011-2015. The new market leaders might have much more upside potential in the intermediate-term, as investors race the setting of the sun on the final innings of the current bull market. The second act of the reversal in 2016 will see opportunity in additional sectors and bonds, stocks, and commodities will behave very differently in the years ahead. Investors should be prepared to manage their portfolios differently.
Disclaimer: DO NOT take the advice of this website as it is for entertainment purposes only. You must alway first contact a professional whose job it is to advise on money matters. A professional financial advisor or planner should be where you get actionable advice on the stock market.