If so, how will you know when to sell? Here is my advice from 20 years of doing what I do.
Market tops are a process. There are many phases of selling. Which one are we in?
You sell for no other reason than to take a profit and lock it in. (Market High)
You sell at the first sign of trouble. (market begins its leg down) Somewhat painful but acceptable.
You can't sell because you were up 20% and now you are up only 10%. (Somewhere between, too low to sell and too high to buy) (this is the beginning of hoping, wishing and praying)
Now you are back to even. No gains. Perhaps your account went from 100k to 120k and now it's 99k. (Sick to your stomach, kicking yourself, shoulda coulda woulda but your ego and mind keeps telling you as soon as you can get out with a small profit, maybe acct value of 105k you are all set!)
Further losses------Market is in panic mode, some are happy they said "told you so", your broker doesn't take your calls and you won't show your wife the investment statement. You begin to drink, pick you nails and pull your hair. Account value is 80k. CNBC brings out all the doom and gloom market pundits. You can't look at your kids.
Complete portfolion destruction. Account value now 60k. You are gnashing your teeth, CNBC now brings out pundits how to invest without risking your prinicpal. Blue chips are trading at a PE of 10x and no one wants them. EVERYTHING is down. Time magazine features a front cover with the phrase " How low can the Dow Go?" (The wife finds the brokerage statement and texts you that she demands answers as to how YOU lost 1/2 of their money) With your hand shaking, your tail between your legs, you make the call to your financial institution, you are on hold for 8 minutes and it feels like 90. It's 3:57 and you wonder if you are going to get your order in. The broker answers and calmly says, "how can I help you?" You sheepishly say
"sell it all'. You feel like shit, you know your wife is going to be standing in the doorway waiving the tattered brokerage statement at you.
You stop at the bar on the way home. [:/]
The next day, the Dow is up 280 points.
Market tops are a process. There are many phases of selling. Which one are we in?
You sell for no other reason than to take a profit and lock it in. (Market High)
You sell at the first sign of trouble. (market begins its leg down) Somewhat painful but acceptable.
You can't sell because you were up 20% and now you are up only 10%. (Somewhere between, too low to sell and too high to buy) (this is the beginning of hoping, wishing and praying)
Now you are back to even. No gains. Perhaps your account went from 100k to 120k and now it's 99k. (Sick to your stomach, kicking yourself, shoulda coulda woulda but your ego and mind keeps telling you as soon as you can get out with a small profit, maybe acct value of 105k you are all set!)
Further losses------Market is in panic mode, some are happy they said "told you so", your broker doesn't take your calls and you won't show your wife the investment statement. You begin to drink, pick you nails and pull your hair. Account value is 80k. CNBC brings out all the doom and gloom market pundits. You can't look at your kids.
Complete portfolion destruction. Account value now 60k. You are gnashing your teeth, CNBC now brings out pundits how to invest without risking your prinicpal. Blue chips are trading at a PE of 10x and no one wants them. EVERYTHING is down. Time magazine features a front cover with the phrase " How low can the Dow Go?" (The wife finds the brokerage statement and texts you that she demands answers as to how YOU lost 1/2 of their money) With your hand shaking, your tail between your legs, you make the call to your financial institution, you are on hold for 8 minutes and it feels like 90. It's 3:57 and you wonder if you are going to get your order in. The broker answers and calmly says, "how can I help you?" You sheepishly say
"sell it all'. You feel like shit, you know your wife is going to be standing in the doorway waiving the tattered brokerage statement at you.
You stop at the bar on the way home. [:/]
The next day, the Dow is up 280 points.
