Sorry for my late reply. I decided to have a bit of an outing while the weather is still good here.
What am I doing now you ask? I am a speculator and have no TA skills so to survive I need to just get out of the way of a major downward move.
After being full investing in 2010 and 2011 and being repeatedly battered about I was seriously thinking early this year about selling out of everything, except for PGI. In particular I was concerned about the playing our of the sell in May and go away syndrome (which now starts in April or even March for the junior goldies).
However, somehow I did not follow up this plan and only sold the weaker shares and was left with about 45% cash and 55% shares. I have tried my luck unsuccessfully with NMG and now have around 52% cash and 48% shares. To some extent my proportion of cash has risen because my portfolio has fallen in value, which just makes it clearer to me why I was wrong not to carry out my plan.
I am toying with the idea of selling more shares, but not PGI (unless they really stink). However I am reluctant to do that because I think that what I have is already very cheap. Therefore I would only sell them if I saw better opportunities elsewhere or if it was clear to me that they will fall significantly more (say another 25%+).
We all have our different viewpoints and risk tolerances. My view is that the US market will go lower, that the sell in May syndrome will take hold, that European and perhaps other issues will depress world markets, that China needs to keep pumping its economy to keep its bubbles going, that QE3 may be politically difficult to introduce in the US (at least until their economy has significantly stalled), that US investors/speculators will hold back until there is more QE3, that the US tax and debt ceiling uncertainties could influence their market. There are a variety of views on where the S&P500 will be in 2012 (around 1500 as suggested by Prof Jeremy Segel versus 1167 suggested by Morgan Stanley).
All I can do is position myself to survive, and to be able to benefit from an upturn later on by deploying spare cash on companies whose shares are liquid. One of my past errors has been to see the upside and not account for the downside. I doubt I will ever again be fully invested on an ongoing basis again after the gyrations of the last 2 years.
If Benny says he will do QE3, I will start buying more goldies. Buying in advance of his OK could prove costly, so I would be careful. I thought I was really smart because after selling down my portfolio in mid 2010 due to market turbulence, I then bought back just ahead of his QE2 announcement and reaped a reward. I now know that was plain dumb luck.
This is a very different market from the past. Liquidity can vanish very quickly and what seemed like a fairly safe bet can turn into a nightmare. A lot of small investors have left the market. We need to think who will be there to buy our shares when we want to sell.
These are just my views. There are a lot smarter people out there who will probably give you a completely different picture.
(20min delay)