I moved my 401k to 75% cash yesterday. Doesn't feel right to me up here. If I'm early, so be it, just don't want to be a part of this Bull market anymore.
You may be right, or you may be wrong. The next big bear market reason is probably still unknown. Some guys were saying that 5 years ago when the S&P was in the 2200. Again, you may be right, like those guys 5 years ago (they were finally wrong!).
You could hedge? Buy puts or sell calls maybe. I don't think it makes sense to go to cash yet. There is still the possibility of a shorts-destroying end of year rally.
trading your 401k = not great strategy. Keep it invested in sectors you think will see the greatest growth between now and retirement.
Cash is a hedge. ALL hedges cost you money (like insurance)... until you REALLY need them! (It would be interesting to learn how much money was "wasted" on put option buys.. hedges.. on the market during this manic rise...)
Hedging is expensive. I may be selling CSP if volatility spikes or individual stocks get destroyed. This may naturally get me back in. But, cash is a position. Cash means I will have lots of dry powder if opportunity presents itself.
There’s no right or wrong because I am not measuring myself to any benchmark. But I know that if I loose all/most of the profits from the run from Covid lows, it will feel much worse than making additional money by staying invested.
If you have a long investment horizon, trying to time the market based on 'feelings' is a mistake you'll pay for years from now.