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Wall Street

Getting back after the where we were after a stock market crash is in ways just breaking even to where we were before. Recovery is not growth. We lost the opportunity of growth in the years of recovery, some would say even 25 % or more of lost growth potential.

Some people cannot afford the volatility of the market, at their age, so funds are a good choice after having captured the market growth.

But, I find there is value to selling some stocks soon, at some comfortable time, taking the  “winnings off the table” and to invest in value funds. This is a conservative move. The question is when. For example, that time when we say it is good enough, to say there is a risk in holding on now should the stock market take a dive again. It is about faith in the market too and loosing potential earnings staying in. There is a cost for doing and not doing, my favorite line.

One thing I am sure on is that it is a good idea to re-balance your portfolio some at intervals. So now or soon may be your time to cap a few stocks and reinvest the money to buy out of favor stocks that have more value than their are priced.

Other good investments include mutual funds, ETF’s, Index and or SPIDR funds as they spread the risk so your money will be less volatile. Funds that have value and over the last 3-5 years, or even 10 show their track record. Do your research.

All time highs are near the real top and stocks can plummet fast. Sometimes fiscal cliff or other worries make people fearful. The market can dive down fast as in May 2010, a trading glitch set off a so-called flash crash that sent the Dow plunging 600 points in five minutes.

Some stocks like JNJ, I would hold onto for the long term for retirement, slow growth and for dividends. This beats the money markets and bank earnings. In some stocks.

I suggest to cap it and sell it and take the profitable earnings. It is paper earnings unless you sell and own the earnings. No one knows the market top but we do know in just weeks it has in the past taken a dive. Highs do not last. I feel to take my winnings and invest in more stable value and say ~ good enough.

I like the Vanguard fund family – and others as well.

Primarily investing is about risk tolerance at this point in time regarding what to do next financially. What funds are worth your consideration? I will answer your questions. Know your values and risk tolerance. More importantly is how do you decide based on your values and needs. Then there is always the over arching big picture, is math and probabilities, risk and opportunity cost.

 

 

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