It's been a rocky ride for investors recently and it's unlikely that the volatility is over despite the S&P/ASX 200 (INDEXASX: XJO) looking set to end the week on a high.
One fund manager who looks to have timed the market particularly well has been Wilson Asset Management (WAM). WAM manages three listed investment companies (LIC) including the $650 million WAM Capital Limited (ASX: WAM).
WAM Capital's latest monthly report shows that the manager aggressively raised cash levels over the month of September.
From August to September, WAM increased the cash holding of the portfolio by $100 million and instigated a small level of short positions. Perhaps most telling of all, WAM Capital's portfolio weighting as at 30 September 2014 was 45.7% fixed interest and cash!
Better buying ahead.
The high cash levels would suggest that WAM expects better opportunities to buy stocks at lower prices in the future – given the market falls in September it looks a smart move.
Too late to follow?
If you were clever enough (or lucky enough) to get cashed-up prior to the recent market falls you're obviously in a pleasant situation now with a number of stocks available at lower prices than a month ago. Trying to time the market however is notoriously difficult and selling after the fact can leave your portfolio exposed to missing a rebound in stocks.
A safer bet
Rather than moving to cash at this stage, a better option could be to readjust your portfolio holdings into even more appealing opportunities. Some of WAM Capital's largest portfolio positions could be worth considering in this regard – major holdings include Slater & Gordon Limited (ASX: SGH), Mantra Group Ltd (ASX: MTR) and Greencross Limited (ASX: GXL).