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

Follwing Florida Massacre, EB Schools Add Armed Officers to Security

February 17, 2018

EAST BRUNSWICK, NJ - At a meeting Thursday night, the East Brunswick board of Education unanimously approved a resolution to engage the East Brunswick Police department to place armed police officers at each school building in the district throughout the entire school day.  In a report released by superintendent Victor Valeski yesterday, township officials asserted that the move would ...

Obituaries

Christina C. Sweet (Diaz) 79 years, died Monday January 1, 2017 at Robert Wood Johnson University ...
Read more
- Nov 15, 2017
Phillip A. Petracca, also widely known as Filippo Neri in the Italian-American Radio and ...
Read more

New Brunswick/Middlesex County Reentry Site Opens

February 14, 2018

MIDDLESEX COUNTY, NJ - The New Jersey Reentry Corporation (NJRC), a nonprofit agency serving court-involved individuals, is pleased to announce the grand opening a new reentry site in Middlesex County on Tuesday, Feb. 20, 2018 at 11 a.m. The office is located at 57 Livingston Avenue, Unit 3, New Brunswick, N.J. 08901. Assembly Speaker Craig Coughlin will offer remarks and cut ...

Track and Field: Union Catholic's Boys and Girls Win 14 Events at Lawrenceville Invit.

LAWRENCEVILLE, NJ -- The Union Catholic boys and girls track and field teams racked up 14 victories and a bunch of personal best performances at Saturday's Lawrenceville Invitational at the Lavino Field House in Lawrenceville.

In the girls competition, UC's Khamil Evans continued her red hot junior season with a pair of sprint victories. Evans, who lives in Piscataway, ...

Rutgers to Host Exhibit of Sen. Frank Lautenberg Papers

NEW BRUNSWICK, NJ - Frank Lautenberg, New Jersey’s longest-serving U.S. senator, left an outsize imprint on state politics and national policy by the time he died while in office, in 2013.

His papers, now curated and maintained by the Rutgers University Libraries, encompass 2,250 boxes of hats, buttons, campaign stickers, vinyl records, paper documents and other artifacts that, laid end ...

Upcoming Events

Carousel_image_d50fa1a5b6c86e5f49d5_spagetti_dinner

Sat, February 17, 6:00 PM

South Plainfield

Holy Savior Academy Spaghetti Dinner

Food & Drink Giving Back

Mon, February 19

State Theatre New Jersey, New Brunswick

Mr. Popper's Penguins

Arts & Entertainment

Mon, February 19, 12:30 PM

PISCATAWAY

Matinee Monday

Arts & Entertainment

Tue, February 20, 1:00 PM

Piscataway

Community Blood Drive

Health & Wellness

Sat, February 24, 2:00 PM

Edison High School Auditorium, Edison

Free community viewing of "BAG IT" - Award ...

Arts & Entertainment Green

Westfield Cops Search for Suspects After Overnight Carjacking at Scotchwood Diner

February 14, 2018

This story was updated at 12:30 p.m. Wednesday.

SCOTCH PLAINS/WESTFIELD, NJ — Police are still searching for the suspects who carjacked a vehicle in the parking lot of the Scotchwood Diner (1928 Route 22) in Scotch Plains around 12:30 a.m. Wednesday, according to the Scotch Plains and Westfield police departments.

Patrol units responded to a report of a carjacking at the ...

How to Talk with Kids About the Florida Shooting

February 15, 2018

Guest Column

The tragedy of the Florida school shooting is devastating leaving 17 killed and 15 injured. Our children can easily identify with what occurred yesterday. It will be the topic of conversation today in schools everywhere. School administrators are doing all they can to provide support and guidance. The shootings affect children, teachers, and school personnel. The ...

Let the Games Begin

I am truly awed by the Olympics.  Watching these superb young athletes on TV inspires me to renew my membership to the gym and pursue my lifelong dream of taking home the gold.  

 

The problem is that in my deluded head, I can see actually see myself standing atop the podium.  I am wrapped in a puffy designer ski coat with a huge piece of bling slung around my neck ...

The Best Way to Pay Your Child a Compliment

“Of course you’re good-looking.”  “You’re the best friend ever.”  “Who wouldn’t want you on their team?”  Is there a parent out there (including me) who hasn’t praised a child in order to make him or her feel better?  Sometimes it’s true, and sometimes we say it because we just can’t stand to see them ...

Very Hot Tea Increases Cancer Risk

Researchers in China studying the consumption of “burning” hot tea, alcohol, and smoking habits of greater than 450,000 people ages 30 –79 for more than nine years found a five time greater risk of esophageal cancer in those who engaged in all three of the behaviors and a two time greater risk in those who either smoked or drank alcohol and consumed burning hot tea as compared ...