On 3rd March this year, I sold every single stock in my portfolio and alerted North Tech 15 subscribers the same day.
The S&P 500 closed at 6,816
14 stocks in total, and the alert text for each liquidation was the same:
Raising cash after an extremely good run and the uncertainty around the conflict in the ME
At the time, markets felt remarkably buoyant fuelled by a long run of tech-driven gains, beneath the surface the geopolitical picture was darkening.
The escalating conflict in the Middle East introduced a level of uncertainty that, in my view, the market had not yet priced in.
Sometimes, the most productive thing an investor can do is protect their gains and wait for the dust to settle.
Today, the index sits at 6,580, a drop of nearly 3.5% in just a few weeks.
For a long-term investor, a 3% move is rarely a reason to panic, but it is a helpful reminder that markets do not move in a straight line.
Sometimes, the most productive thing an investor can do is step back and wait for the dust to settle.
What gives me pause
Many investors feel a constant pressure to be “fully invested” at all times, fearing they might miss a few days of gains.
I take a different view: protecting your capital is just as important as growing it.
This is the kind of setup we analyse in more depth elsewhere, where we look at the specific triggers that move us from “invested” to “cautious.”
👉 Learn more about our risk protection approach
Why this is not risk-free
Selling everything is a significant move. It carries its own set of risks, most notably opportunity cost.
If the conflict had de-escalated overnight and markets rallied 5%, I would have been left on the sidelines.
However, we must weigh that against the risk of a “tail event.”
With oil prices volatile and shipping routes under threat, the potential for a deeper, double-digit correction was, and remains real.
In my experience, it is better to be a week too early than a day too late.
The uncomfortable questions
I am often asked why I sold everything rather than just trimming a few positions, my answer is simple: clarity.
When a portfolio has had an “extremely good run,” your winners often become overvalued at the same time.
The North Tech 15 was launched on 24th August 2024, and has gained 47.62%, compared to 25.52% for the S&P 500.
By moving to cash, I have hit the reset button. I am not anchored to the prices I paid last year.
This allows me to look at the market with fresh eyes and ask: “If I had this cash today, would I buy these stocks at these prices?” Often, the honest answer is no.
I am watching for a “base” to form. I don’t need to catch the absolute bottom. I am looking for a period of stability plus a macro catalyst where the risk-to-reward ratio shifts back in our favour. Until then, I am comfortable waiting.
My current stance remains one of patient observation. I have protected the gains from a very successful period, and I now have the “dry powder” to move when others are fearful.
Good investing is about being selective, not just being busy.
Cheers for now,
David Thomas
Disclosure: I currently hold 100% cash in the North Tech 15 model portfolio.