Historical data from 1900 If you are scared now, click on this link. We remember waiting, and waiting, for ten or more years, for the DJI to go over 1000!
New highs. Buy or sell? A lovely problem to have. In spite of the gloom and doomers, the stock markets have continued their upward climbs. IFO will not make a call on whether this is a bubble, whether markets are guaranteed to decline, or any other predictions.
That’s for the experts. We are a simple, naive woman investor who had never even heard of buying a share in any company, much less thought about buying one herself, until she was about 40 years old.
She started small and safe. Protected by her DDH’s earnings, somewhat larger than her own meager income from clients hiring her freelance reporting expertise, she ventured into the market with his encouragement.
As this blog has reported over the past few years of its existence, she won some and she lost some. Made big percentage gains and big percentage losses, as did the market itself.
The shares in the companes she bought never went to zero, even though one company actually died. Fortunately, she was watching and got out in time to take a big loss, but she at least got some $$$. If she had watched more closely, i.e. read the merger prospectus!!!, she would have actually made money on it. Oh, well. Lesson learned.
Back to the Buy or Sell question. When the market dropped some 30+ percent, she was frozen in place. The question she kept asking herself was, “Okay, if you sell some or all of your stock… what will you do with the proceeds?”
That question kept her out of trouble, because she didn’t have an answer. All asset prices were dropping – metals, real estate, even bonds. So, if she had sold stock, the only winner would have been her broker. Now, she loves her broker, but loves herself more.
So, she didn’t sell. She kept track of her stocks in her Quicken software and watched the 14 or more companies which were in the red, literally, gradually shrink to 10, then 8, then finally down to now – they are all in the black again.
We don’t know whether we are beating any of the market indexes, because we haven’t figured out how to compare our performance to theirs. It’s easy on Yahoo, but you can only list five different companies.
But what about you, dear readers? You may have an absolutely smashing investment opportunity at hand. You could sell all or part of your winning portfolio and invest in that. You may have some duds you would like to get rid of. Go ahead. It’s surprisingly easier to sell a stock that is in positive price territory.
Otherwise, just hang on. Follow the rules and metrics you have established for yourself, buying and selling as if the market was not at record highs, or depressingly low.
And, remember, watch those CEOs!