I have been very bullish on this market since the summer of 2009. Some may say I was a bit late to the party having waited over three months to participate. But I'm a cautions investor these days. I don't like risk and I hate playing on margin. In fact, I can say my absolute worst mistake ever was playing on margin and watching a 3% drop eat away at 9% of my total portfolio in a single day. Margin is dangerous even for experienced investors. As a result of this caution I have been all cash except for what I call "vegas money" since early May of 2013 and have turned very bearish.
The reasons are many but let's focus on one in particular: Margin.
Imagine my surprise when I started doing a little research (statistics found here) and found that just before the 2008 crash margin levels had reached all time highs in the stock exchange. Peaking at $381,370 ($ numbers in millions) in July of 2007. Then reaching a low in February of 2009 at $182,160 ($ numbers in millions) right before the market bottom in early March of 2009.
The last four years look like an exact replay of that scenario. Margin levels have recently hit record highs yet again peaking in April, the most recent statistics available, at $384,370 ($ in millions). Now with the market in decline to the tune of triple digit moves, considering my experience, it will only be a matter of a few percentage points before margin players begin pulling back.
Just in case the link doesn't work...here is the webite I cited.