Happy Thanksgiving. Canadian exchanges are closed today, but US exchanges remain open.

I’m at the point where I’m selling some of my stocks (that I bought based on momentum) for cash. I don’t know that things are going to get worse, but I don’t know that they’ll get better, either, and I’m willing to sit on the sidelines for a bit. I will continue to hold my dividend-paying stocks.

Stocks had the worst week in quite a while, dropping 3.64%. Bond rose is value (0.55%), although interest rates are little moved. Comparing the momentum between stocks and bonds, the advantage goes to bonds, for the first time in a year and a half (May 2013). This does not bode well. A balanced portfolio should now overweight bonds, and very nervous investors may do well to move out of stocks (although it’s impossible to tell in advance if the transaction costs will be offset by avoiding value loss).

Even if I compare a number of asset classes, bonds still show the most potential. Given how low interest rates are, that’s quite a feat. I’m not optimistic about the next couple weeks for stock investors.

Market Outlook October 13, 2014

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