I may sound like the prophet of Doom, but it seems more people are questioning the whereabouts of what stage of the sharemarket cycle we are presently in.

An article today makes good reading. Kevin Armstrong, ANZ-National Bank's chief investment officer is worried where the Dow is heading. He thinks it could be heading not to a crash, but a more destructive loss of investor capital through a protracted bear market.

Alan McChesney of NZ Asset Management (NZAM) is more optimistic. He thinks the sub prime crisis and the property market slump will have only a mild effect on the US economy so estimates a soft landing not a crash to occur. However he rates a year + long bear market as a 50/50 call.

If the Dow is entering wave A, (there seems to be mounting evidence that this is going to happen if not already) my strategy as a NZ asset med/long term investor will be to cash up any of my stocks that start heading downwards in price, and not reinvest unless the stock is in a solid uptrend.
In other words I will be tightening up my criteria to reinvest. I expect to be eventually holding more cash than shares.