S&P 500 INDEX  (2000-2014)

Here is a 13 1/2 year (3650 trading day) moving average (BLUE LINE) for the S&P 500 index. The moving average(growth line) is currently at 1242.90, so as you can see we are still 500 points above that line and if this is a full scale correction, you never really know how far the S&P 500 Index may drop as large gains, followed by large drops, have been the norm over the last 15 years. 

The chart above begins on December 31, 1999 at 1455.72, so if we were to go down another 288 points in the S&P 500 Index, then an Index investor would have made zero% in the last 14 years on his or her index investment. Obviously someone going to a large position in cash right now (in our opinion) would probably be making a smart move as the S&P 500 Index fueled by Federal Reserve stimulus has basically had a straight shot up since 2009. Now that tapering has begun, we have no precedent on how the markets may react going forward. 

With the consumer not spending, manufacturing slowing and emerging markets tanking, there is a great deal of uncertainty out there and it is our belief that where there is great uncertainty (history has proven) that cash is king!