I've been feeling the exact way. Over the last month I've dropped from 15-20% cash to 0-3% buying tech on the dips. I've given consideration to trimming 10% across the board. My problem is that I don't want to trim any Amazon which is back to 15% of my portfolio. I've got a decent chunk in tankers, banks/finance, oil, and stocks like Kohl's which are closer to there March levels than ATHs. If the market just stays in this range, I suspect those stocks will do well.
One thing you could do is hedge with with some of the negative funds like TZA. If they are triple leveraged funds, then owning a 5% position is actually like holding 15% cash position. You can also count any future contribution you know you are going to make as part of your cash position.
If people are thinking of trimming I would not be trimming the tech giants. AMZN, APPL, GOOGL, NFLX etc etc.
If anything trim your industrial and cyclical winners (BA, CAT, DE, EMR to name a few). Those stocks will get pounded in the next downturn. I love them long term. But you can build cash taking profits from those types of cyclical names and go back in again at lower prices. Also if you have some heavy REIT profits (GLPI, MGM, WRE and the like) think about trimming those as well. Energy profits are also an area to trim to build cash.
Typically when I build cash it will be from those types of stocks.
Unless the fundamentals change I typically always hold my consumer staples, big pharma and utilities. Those are my defensive positions that even though will also correct, they won’t drop nearly as bad and of course their yields are powerful.
To recap:
When building a cash position in a long term portfolio trim:
Industrials
Materials
Consumer Cyclicals
Energy
Real Estate Investment Trusts
Hold:
Staples (food, tooth paste, cleaning products, paper products etc think PG, JNJ, CLX, UL, GIS, MDLZ)
Utilities (Gotta turn on the lights and AC/Heater think NEE, EXC, ED, AEP)
Big Pharma (think PFE, BMY, MRK)
Big Tech (people can’t live without their Amazon, Google and Apple...we are certainly in this reality now)
And these days your big box retailers like TGT, HD and WMT are core holdings through recessions with their growing dividends, ever fast growing online presence and simply put cult like followings now. (For the record we are a Target family and only when I am desperate do we venture into our Super Walmart).