The Valuation : Value Investing Through Valuation

The market is entering a ‘cooling-off’ phase

In August, the U.S. stock market appears to be transitioning from an overheated rally to a more volatile and uncertain environment.

As prices have risen rapidly, the door is now open to both profit-taking and short-term corrections.

At times like this, the most important move is adjusting your cash allocation.

Even my AI investment assistant—“Urban Potato GPT”—is currently recommending a 40–50% cash position.
I agree completely.

3 Reasons to Increase Your Cash Allocation Now

1. In volatile conditions, cash gives you strategic options

As market uncertainty grows, cash becomes a source of opportunity, not inertia.

• It allows you to buy into sharp dips
• Helps you stay on the sidelines without realizing losses
• Keeps your emotions stable and clear

Cash isn’t “idle money”—
It’s a strategic asset that enables flexible decision-making.

2. August is seasonally prone to corrections

Summer markets often see lower trading volumes,
And big moves driven by singular events—like rate decisions or earnings reports.

This August is particularly sensitive due to:

• U.S. interest rate policy signals
• Global slowdown concerns
• Geopolitical risk factors

Taken together, the downside risk in the short term cannot be ignored.

3. It’s better to prepare for what hasn’t moved yet

Trying to chase already-risen stocks increases the chance of entering at the top.

By holding cash, you position yourself to patiently accumulate:

• Undervalued stocks that haven’t run yet
• Growth stocks with earnings momentum still ahead
• Companies poised for revaluation after market pullbacks

August may be the month of cash

In investing, sometimes the best strategy is waiting.
Maintaining a 40–50% cash allocation doesn’t mean giving up on the market—
It means giving yourself the freedom to wait for a better entry.

This month, instead of rushing into aggressive buying,
Zoom out.
Watch the market evolve.
And prepare for the next opportunity.