Sell now

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The Three Kinds of Investors Who Should Sell Their Stocks Now

“With the total United States stock market up nearly 200 percent from the 2009 lows and increasing worries about what some pundits are calling ‘bubblelike valuations,’ there are a few reasons you should think about selling now.

You got lucky. Did you buy an investment based on what you heard from your brother-in-law or a neighbor at a barbecue? Be honest! … You got lucky, and it’s time to take your money and run.

You don’t know why you own something. … Maybe you inherited a bond from a grandparent or bought stock in a company where a friend used to work. Whatever the reasons, you now have a smorgasbord instead of a portfolio. Chances are that smorgasbord has done well in the last year or two. That doesn’t make it a good portfolio…. Now would be a good time to look at selling and using the money to build a portfolio on purpose.

You’re a systematic market timer. … systematic market timing is the fancy way of saying you need to rebalance. … For instance, your portfolio design may call for 60 percent stocks and 40 percent bonds. But since stocks have done really well in the last year, your portfolio may now be 70 percent stocks, even with the recent decline. So, in that case, you should be selling stocks and buying bonds to get you back to your 60/40 split.”


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