I don't hedge, Onion, but I have been modifying my strategy. I was prepared to go into the debt ceiling debate with $800K to shop with. I recently dropped it to $600K, and today to $400K. I bought another 10,000 shares of PSEC today with the announcement of their foray into real estate [apartments and shopping center]. Also, another 10,000 shares of RSO; it keeps sliding up, and is primarily a commercial real estate player. I have liked the vibe from Washington lately, and the Prez' inauguration speech as well.
I'm not convinced that the market is frothy. I think that a successful debt negotiation could pop the market up 10% - 15% from here.
Ray if you liked President Obama inauguration speech you must be betting on the GOP to cave in without fight or whimper. I missed anything he might of said about jobs,spending cuts,spending restraint or bringing the country together. I only heard a high ticket shopping list that will add more debt. Were you sober for the speech?
I did buy DELL today but not because of speech.
I also took money out expecting the debt ceiling debate to provide some buying opportunities. And also like you I bought some additional PSEC. I was looking at TICC and RSO for further investment in BDC's but they were trading at 108% and 110% of book value, respectively. I will wait for either of them to do an SPO before buying in. I think buying either right now is risky (SPO risk) to say the least. I am hoping to buy them though.
You are better off moving more money into preferred stocks and away from common stocks if you feel the market is overvalued. I DO NOT think the market is overvalued at PE of 13x. in 2007 it was more than 30x PE. So... I think we are going to move about 30-50% higher over the next 2 years as long as washington doesnt mess things up.