March 9

0 comments

Should I Sell My Stocks?

Clearly, with the current world situation, I am here to be the voice of reason.  You need to stay the course.  Let’s look at why.  There are logical and historical reasons, which I will address below. But, first, I’m getting the same questions over and over again.  Here are the answers: Common Question #1 “Dave, I’m taking money from my portfolio each month.  Do I need to stop that disbursement since the market is down?” No.  Remember, we are assuming an average of 5%.  Did you get more money last year when the market was skyrocketing?  No. You get what a diversified portfolio has averaged for decades. Common Question #2 “Am I being forced to sell stocks, which are temporarily down, when I need to take money from my portfolio?” No.  Remember, the portfolios I design are made up of two buckets.  A stock bucket and a bond bucket. When stocks go down, bonds almost always go up.  If you need money now, we are sending it to you from the bond bucket.  Properly designed portfolios weather these storms because you can tactically determine where to take money from. Common Question #3 “Do I need to worry?” No. Common Question #4 “Should I get more conservative with my investments until this all blows over?” No. I’m going to give you cold, hard data that will debunk the concept that timing the markets in this situation might help.  I want you to know that I am not remotely worried. I’ve been through this before and it always ends the same way. Betting against innovation and progress is ALWAYS a mistake. Here is a profoundly important chart. What does this mean? The chart is pointing out that, over the past 20 years, the stock market has averaged 5.6% per year.  But if you missed the 10 best days, you would have lost two-thirds of the overall profits.  Think about that!  Out of 7,300 days, missing the best ten, you decimated your long-term returns. You cannot time the market.  “I’m going to wait until things settle down.”  When is that exactly? After the market has two amazing days, or three?  Oops, you just messed up your whole life-long investment strategy. Be Blessed, Dave

You may also like

We Will Go Bankrupt Last

Our youngest son earned his first detention this week. When we asked why, he looked us in the eye and insisted he honestly didn’t know. Turns out he was watching a video on his school iPad when he should have been working. Everyone at his school has iPads because they don’t use textbooks. His sentence

Read More

Interest Rates in Plain English

Family Update First, good news on our sweet Penny. As you may remember, she got into a bottle of allergy pills and ate about 120 of them. I’m happy to report she’s fully recovered. In fact, she was back to full strength in just two days.This week I took my mother-in-law to the eye surgeon

Read More