What Now?

After a big rally, what should individual investors do now? This is not an easy question because everyone loves to see his/her account balances increasing. It gives a good feeling that no one wants to disturb. But you must! Remember, buy low, sell high? Do some selling.

First, get rid of those positions that clearly have not worked out. Subtraction is easier than addition because it is easier to detect failure than predict success. Clear out the underbrush and hold onto the cash. Sell a portion of your biggest winners, but not all. One shouldn’t be afraid of success, just be prudent and take some profits. Set that aside, too.

It may take some time but be patient. Remember, cash now earns a decent return itself.  The environment always goes through volatile periods, and we may be approaching one with the presidential election coming up soon. Make a list of possible acquisitions and at what price levels you would begin to find them attractive. A better time to pounce is coming. In the meantime, know your strategy and stay steady my friends.

The Lonely Bull