Guest Column

The Stock Market Is Up- Should I Sell?

6e0d52931971ee6c660c_250x250JPEG.jpg
6e0d52931971ee6c660c_250x250JPEG.jpg

Just when you thought the stock market couldn’t climb any higher, President Trump addressed a joint session of Congress.

According to MarketWatch, the Dow Jones Industrial Average traded in record territory on Tuesday (February 28) above 21,000, after surging more than 300 points. The S&P 500 rallied 36 points, while the Nasdaq surged 80 points.

According to experts, the likelihood of an interest rate increase in March went from 35% before Trump’s speech, to 69% following the speech.

Sign Up for E-News

No matter your political leanings, we can all agree: America has never had a CEO quite like President Twitter. Among other things, an unconventional White House makes it even harder to decide what to you’re currently sitting on a cash cushion.

What to do, what to do.

If this was a debate team, I’d be comfortable on either bench debating if one should hold onto their cash, or invest. There are strong arguments on both sides.  

Argument 1: Hold onto Cash, Wait for the Sell-Off

The stock market historically corrects about 10% every year. We’ve seen this happen regularly over the past few years, in fact, we saw it twice last calendar year: once in January (“The worst start to a year in history!” cried the media) and again in June with Brexit.

We get a much larger correction of 20-30% every 5-6 years on average. The last one was the financial crisis, and believe it or not, that was over 8 years ago.

If history is any indication, we are WAY overdue. Forget political fisticuffs at home and overseas- a 20% correction would be “just another day” in the natural life cycle of the stock market. We are simply overdue.

At this point, a healthy 20% sell-off brings us back to Dow 16,000. The media would have a field day calling it an apocalypse, when in fact it would be the ~5-year market correction we’d been waiting for. If that were to occur in the near future, pat yourself on the back for sitting on cash, and start buying!

Argument 2: This Wave Keeps Growing, and I’m Gonna Ride It!

I can’t remember a time (not just in my life, but in our history) when the American people elected an administration and Congress on a mandate for CHANGE when the economy was so good.

The rants and chants of GROWTH, GROWTH, GROWTH would have you believe it was 2008 (the financial crisis), 1980 (stagflation, Jimmy Carter, etc.) or the Great Depression. In reality, our unemployment numbers are okay. Wages are increasing. Growth is positive at about 2%. Oil prices are moving up.

We aren’t in 2008 anymore, Toto.  

The stock market is at all-time highs. The real estate market is back to all-time highs (in most places), and the bond market is a few months from all-time highs. Why are we in red alert? I don’t see the house burning down.  

If President Trump gets half of what he wants, we will probably see a BOOM in the economy. An economy already trending in the right direction, combined with the stimulus of lower corporate rates, serious talk about eliminating the AMT (alternative minimum tax) and possibly some individual tax reform? As we say in New Jersey, “fuhggedaboutit.” That would free millions of dollars back into the economy for spending and investment. It would be like throwing gasoline onto an already smoldering fire.

But enough about free-market capitalism. So. What to do?

Personally, I am not selling any of my positions, because I’m going to continue riding this pony. I’m not selling anything, but I’m not buying anything either. I am building cash, so I can take advantage of the pullback WHEN (not IF) it occurs.    

Here’s the big question:  does it occur at Dow 21,000 … 22,000 … or crazy outlier Dow 25,000? We are going to get that 20-30% pullback, but when? There is an old saying my pal Archie uses on me all the time: “being early is the same as being wrong.”  

That may be more true right now than ever.

If you sell some investments too early, will you miss part of the wave? Yeah. But you can’t beat yourself up too much for selling some things when the market is at an all-time high.

If you’ve had a major purchase on your mind: if you’re getting a car, if you want to build an extension onto the house, if you’re finally buying that retirement beachfront bungalow- now would hypothetically be a good time to sell some things.

Timing the market never works. Which is why once again, I end this white paper with the most frustrating (but honest) answer in the history of financial planning:

Q: Should I sell some stocks right now?

A: It depends.

I rest my case.


These are the opinions of Bodnar Financial and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is no guarantee of future results. Indices mentioned are unmanaged and cannot be invested into directly.

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer. Click here to submit a Guest Column.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Piscataway

Steven Cahn for Ward 3 Piscataway Township Council

May 19, 2018

Why I am Running for Township Council:

I am running for re-election for the 3rd Ward Piscataway Township Council position because I want to remain part of the team that has been very successful in making great improvements to our community in recent years. We have been named three times (2008, 2010, 2014) by MONEY Magazine as one of the best towns to live in America. I am also running because ...

Michele Lombardi for Ward 4 Piscataway Township Council

Hello, I’m Michele Lombardi, your Piscataway fourth ward councilwoman. I’m asking for your support in the upcoming democratic primary race on Tuesday June 5th. I care about what happens here in Piscataway.

I have lived in Piscataway my whole life, I was raised by parents who have strong family values and taught me to be involved in my community. My dad was a volunteer firefighter ...

Mohammed Raqeeb for Ward 4 Piscataway Township Council

Mohammed Raqeeb for Ward 4 Piscataway Township Council, June 5 Democratic Primary

1. Why are you running for election for Piscataway Township Council, Ward 4?

Piscataway is a very special place to my family and me. Along with my wife, I have been a homeowner here for 13 years, where we are raising our 3 children. I am running to be the Ward 4 representative on Piscataway’s Township ...

Frank Uhrin for Ward 1 Piscataway Township Council, June 5 Democratic Primary

1. Why are you running for election to the Piscataway Township Council?

Little League baseball and Pop Warner Football have taught me a lot: teamwork matters, hard work counts, and there is a place and role for everyone.I cherish the time I spend as a Little League commissioner and Pop Warner president because the sparkle in every child’s eye when he or she makes a great play or comes to ...

Dr. Tom Connors for Ward 2 Piscataway Township Council, June 5 Democratic Primary

1. Why are you running for election for Piscataway Township Council, Ward 2?

I have been a resident of Piscataway for the past 30 years.   I have been a Democrat my entire life.  I am running for election because I'm tired of Piscataway’s career politicians who have made decades of unfulfilled promises. In my book, they get a failing grade for how they have handled the ...

Staci Berger for Ward 3 Piscataway Township Council, June 5 Democratic Primary

1. Why are you running for election for Piscataway Township Council, Ward 3?

I am running for the Piscataway Township Council Ward 3 position because our community needs new leadership. I will be the independent, principled, and collaborative advocate our neighborhood deserves.

I have been a Piscataway homeowner for 20 years.  I am proud that my husband, Bill Irwin, and I are raising ...

Dr. Jacqueline Littlejohn - Candidate for Piscataway Town Council

Why are you running for election to the Piscataway Township Council?

I am running for election to the Piscataway Township Council because I believe that a vibrant democracy only flourishes when the governed have a voice in their government, be it in the form of compromise, protest, or even becoming viable candidates themselves. I have chosen the latter approach. As a candidate I want to be the ...

The Piscataway Democratic Organization Names its 2018 Ward Slate

The Piscataway Democratic Party is putting forward an incredible slate of ward candidates for the Township Council.  “Frank Uhrin, Jim Bullard, Steven D. Cahn and Michele Lombardi have brought us a 12 percent drop in the tax rate, many new job opportunities for hard working residents, and a rise in property values,” party chair and former mayor, Ted Light said.  ...

Man faces 25 charges from nearly 2-month string of car burglaries

May 17, 2018

NEW BRUNSWICK - A city man faces a long list of charges following his arrest for a nearly two-month long string of car burglaries, authorities said today.

Ryshawn Willaims, 34, was arrested Tuesday and now faces 25 criminal charges, said police Capt. J.T. Miller

Williams is accused of multiple counts of burglary, theft, possession of burglary tools and fraudulent use of a credit ...

Obituaries

Toms River – Mary Stella Whiteman, 97, passed away peacefully Saturday May 19, 2018 in Rose ...
Read more
Piscataway – Reinhard Rudolf Kiefer, 85, died Sunday March 11, 2018 at home. Born in ...
Read more

Relay For Life Top Fundraiser Brianna Cagan – Event Set For June 2

May 20, 2018

When Brianna Cagan’s dad was diagnosed with non-Hodgkin lymphoma, she and her family wanted to do something meaningful to fund cancer research. Brianna, her mom Sue Kelly, and their friends started a started a Relay For Life team called “Pearly Girls.” Seven years later, the high school freshman is the American Cancer Society’s top individual fundraiser for the Berkeley ...

ESCNJ Raises $12,000 at 6th Annual 'Autism Awareness' Fundraiser

For the 6th straight year, the Educational Services Commission of New Jersey's (ESCNJ) Annual Autism Awareness Swim & Play fundraiser on behalf of Autism New Jersey was a great success.

Total funds raised were approximately $12,000, as a result of pledges for laps completed, T-shirt sales, and families participating in arts and crafts activities.

The event received additional ...

Violent Campus Rapist Sentenced in New Brunswick

NEW BRUNSWICK, NJ - While walking across the Rutgers new Brunswick campus two years ago, a young woman was grabbed, viciously beaten, and raped by a middle-aged man from Newark.  She was saved by several students who intervened on her behalf.  Yesterday, her attacker was sentenced to 22 years in prison with no early release possibility.

Middlesex County Prosecutor Andrew C. Carey ...

Holy Savior Academy Presents ‘The Sound of Music,’ Eighth Graders Inducted into Thespian Society 

SOUTH PLAINFIELD, NJ – Holy Savior Academy's Drama Club performed 'Getting to Know: The Sound of Music' on May 3 and May 4. 

Holy Savior Academy's Drama Club just finished its fourth year and has performed six shows. The Drama Club is run under the direction of Susan Loughlin, Daneile Micale and Eva Tripodi. This year’s production, which featured a cast ...

Westfield Audience Cheers for NJ Festival Orchestra’s Season Finale

May 20, 2018

WESTFIELD, NJ —  The New Jersey Festival Orchestra presented its season finale,  In London Town, at the Presbyterian Church in Westfield Saturday night. It was auspicious timing, as the royal wedding had taken place in England just that morning.

“We were so happy when Prince Harry and his bride picked our finale date,” Linda Doyle, executive director of the NJFO ...

A Royal Pain

I went to a big wedding over the weekend.  It was in England.

I like to think I was invited, but according to the Royal Guards and the Thames Valley Police I was not.  But more about that later.

You see, not too long ago I received an evite addressed to me from H&M@royalwedbot.co.uk.  Curiously, it was in my spam folder with a warning message. For an evite it was pretty ...

TAPinto Featured Franchisee: Steve Lenox of TAPinto Paterson

This week's feature will focus on TAPinto Paterson's franchisee, Steve Lenox. Find out how the current owner of a public affairs firm went from a former State Director for Senator Frank Lautenberg to a proud TAPinto franchisee for New Jersey's third largest city.

 

Q. When did you join TAPinto.net?

I joined TAPinto.net in September, ...