Yesterday was a great opportunity to invest cash, with the market dropping significantly early in the trading session. I was able to invest a significant portion of my remaining cash, and am now about 90% invested with 10% cash remaining. the S&P 500 dipped as low as 1812 before rebounding nicely to end the session at 1859, still down about 22 points from the previous close, but up 47 points from the day’s low.
I have weighted the technology, industrials, consumer discretionary, energy, and healthcare sectors, with heavier weights in tech, industrials and energy. In healthcare, my focus is in biotech specifically.
Should we see further downside, which is likely, I would expect to see the S&P 500 set a bottom in the 1780 to 1800 range. While we could certainly move lower than that, I think this is a reasonable target. Should the market fall to this level I will invest my remaining cash. Looking ahead, I think the early declines we have seen to start 2016 have provided an excellent opportunity for U.S. stocks to outperform other asset classes for the balance of the year.