Don't Be Smug
Are you thinking that the market is set for the foreseeable future and indices will make and exceed recent highs?
Do you talk about stocks with friends and your purchases of "POT stocks" and the 75% gains that you immediately realized?
Do you feel smart???
In August of 2011, I was on vacation in the midst of the European debt crisis and S&P downgrade of US debt ( for some reason my vacations coincide with major market moves down- no rest for the wicked??). I remember the moment vividly and exactly where I was. I was in line at an In and Out Burger when I received a call from a client. My 2nd mistake was answering the call ( my first was giving this client my cell phone number) He proceeded to moan and groan about the market and the future of stocks, bonds, capitalism and the free world.
Against my advice and defense of capitalism and the free world ( I left stocks and bonds to fight their own battles), my client sold the following stocks:
1. General Electric @ $15.27
2. Exxon Mobil @ 69.31
3. Diageo @ 74.88
He has regretted this move since. He has regretted the move because these dividend paying, conservative names have appreciated greatly almost since the moment that he made that decision. He has regretted it because he made an ALL OUT move that has left him an outsider as the market has moved higher.
Our point here isn't that we are always right. (though if you want to believe that go right ahead). Our point is that emotional decisions to go ALL OUT or ALL IN are grandiose gestures that can frequently backfire.
Don't be smug.
Don't get caught up in the market highs. It is fine to be aggressive but the days of panic and consternation aren't so long ago. Our advice is and has been to stay invested, stay diversified and keep your head while others around you are losing theirs - both due to panic and greed!!!!
Please note that all data is for general information purposes only and not meant as specific recommendations. The opinions of the authors are not a recommendation to buy or sell the stock, bond market or any security contained therein. Securities contain risks and fluctuations in principal will occur. Please research any investment thoroughly prior to committing money or consult with your financial advisor. Please note that Fagan Associates, Inc. or related persons buy or sell for itself securities that it also recommends to clients. Consult with your financial advisor prior to making any changes to your portfolio. To contact Fagan Associates, Please call 518-279-1044.