It's been a great run if you've been in stocks since 3/09.I use that 3/09 date because thats the date where my relative strength of stocks vs moneymarket turned to favoring stocks.
If you took that signal your up over 60% in the s& p alone.
The big question is what are you going to do now. I'm not saying that we're not going to continue up.
I don' t make those kind if predictions.
What I am saying is that you have to be prepared in case stocks start down.
I know what happens. I've been there done that.Your feeling good about yourself and your financial advisor. Your both feeling pretty smart right now. But what's your plan?To give you an example of my plan and it's MY PLAN and the plan I use for my clients. It might not be for you.I am watching the s&p chart. At current levels if it declines to 1285 it will be the first sell signal in the chart of the s&p since 12/2011.If it does hit 1285 I will move approximately 25% of my clients money out of stocks and into moneymarket. At that point I will see how it plays out. My main indicator that compares relative strength of stocks bonds and cash remains on a buy signal for stocks so until there is a change in that indicator I will stay overweighted in stocks.
It's all about capital preservation and I would be taking the 25% off to protect that capital.On the other hand for those that have been sitting in cash/moneymarket since 2008 this is a good time to start putting some of that money back in the market. At current levels you could start putting back into the s&p (an index fund preferably) like 25%. If the s& p drops below let's say 1280 you could just move it back to cash. If it continues up you at least have some invested.The point of this post is to get you to start thinking about what to do.
Sort of like Noah didn't wait until it started raining to build an ark
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