September 6 update:

Investors can probably ignore this. Trades pay attention. High rates of growth, the higher the worse, combined with complacent or Pollyanna investors along with stock analysts that give in to assuming an unrelenting upward trending stocks is a circumstance that inevitably leads to a correction. Listen to Cramer (Mad Money). He has experience beyond what most of us have.

Hold more cash, be ready to hedge (buy TZA or TVIX), and don’t panic sell. Given the solid underlying fundamentals that include earnings and economic growth, any correction is healthy and allows for the bull market to continue. On the other hand, any unexpectedly bad earnings that tip a whole sector into a sell-off will most likely involve contagion. Be prepared beforehand so that panic selling is not what you do. Of course, if everyone expects a correction, the more likely it is that their collective preparation will cause the correction. So who would now be surprised at a correction? Not many. Consequently, any anticipated correction will lead to strong buying and not last long. Be ready for that possibility as well.

Friday, 10/13 update:

I’ve noticed that many of the high yielding ETF’s have received a lot of cash inflow and seem overvalued. A bubble could be forming in this area and if it pops the highly leveraged high yielding ETF’s could suddenly fall in value. That might be the best time to buy them but you don’t want to hold them at their peak values and suffer sudden capital loss as a result. Consequently, I am trimming my exposure in this area. For those relying on high yielding ETF’s for dividends, you might want to consider simply holding more high growth stocks such as those I’ve recommended and at the same time more cash. As long as capital appreciation equals or exceeds your cash outlay for expenses you will not lose any portfolio value. Moreover, the stocks will not correct as much during a sell-off and will more quickly recover. Buying the high yielding ETFs (e.g., LDP, EXG, JPS, etc.) after a sudden and sharp sell off will give you higher yields as well as capital appreciation. Good Investing!