Gut check: Goldman’s advice to boost cash signals “Puke Point” has arrived now that US markets have turned negative for the year. What is the puke point? It’s when all rational decision-making, associated with risk-taking, is overwhelmed by the physical sensation caused by cumulative losses that wipe out your gains. The pace of losses are accelerating as more portfolio managers reach their puke point and cut their losses.
Stock investors have had a great run in recent years, but with cash now offering positive inflation-adjusted returns, it may be wise to dial back on risk