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Why This Expert Is Cashing Out His Portfolio

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Why This Expert Is Cashing Out His Portfolio

This piece contains the opinions of Marketfy Maven Ron Insana that do not reflect the opinions of Benzinga.com.

Marketfy Maven Ron Insana just issued the following alert to his subscribers:

Subject line: GOING TO CASH!!!!

Given the crash in commodities, the currency crisis in Russia, and other emerging markets, along with the prospects for the Fed to alter its language on when it expects to raise interest rates, I am taking the rest of the portfolio to cash at the opening bell.

As you have seen from recent trade alerts, I have been selling stocks for the last couple days, taking my cash position above 40 percent. It will be 100 percent early this morning.

While I believe we remain in a secular bull market for US stocks, the risk of a mini-meltdown is rising every day, thanks to the above-mentioned factors, coupled with plunging oil prices, which risk touching off a panic in high-yield bonds used to finance speculative energy projects in the US.

Global interest rates continue to collapse, with yields on Japanese government bonds down to .36 percent, while 10-year Swiss yields are below .25 percent!!!

Global investors are voting with their feet, which merits consideration and an abundance of caution in the short run.

As Keynes said, "In the long run, we're all dead."

However, in the short run, it is time to take precautionary steps so that we live to fight another day!

Ron

Prior to the cash-out, Insana held short positions in Equity Residential (NYSE: EQR), Starbucks Corporation (NASDAQ: SBUX) and Lennar Corporation (NYSE: LEN), along with long positions in iShares MSCI Japan ETF (NYSEARCA: EWJ) and iShares MSCI Germany Index Fund (NYSE: EWG).

Image credit: Sean McMenemy, Flickr

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