Wednesday, March 04, 2015 03:19pm
North Adams, MA now: 36 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Not If, But When
By Bill Schmick On: 04:47PM / Saturday February 02, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
1

On the technical front, more and more indicators are flashing warning signs. The markets look extended and investor sentiment points to extreme bullishness. Those are usually signals that we are due for a sell off.

That does not mean that the markets won't go higher but the higher the averages climb without a pullback, the sharper the decline will be when it does occur. Remember too that pullbacks are good for the markets. Two steps forward and one step back is the rhythm of just about everything and the markets are simply a reflection of that fact of life. We have had a good run over the last few weeks and the averages are close to historic highs for good reasons.

The traditional Christmas rally was postponed last year because of concerns over the Fiscal Cliff. Prior to that, in November, some investors vented their disappointment over the re-election of President Obama by selling the market. They were convinced that without Mitt Romney, the world would come to an end.

As a result, since the beginning of the year, many investors have been playing catchup. As predicted, once the Cassandras had been proven wrong on tax hikes, spending cuts, the growth of the economy, the debt limit and whatever else they were fretting about, the bears have been making up for lost time and have been throwing money at stocks hand over fist.

As I explained last week, we may also be seeing the beginnings of a shift out of U.S. Treasury bonds and into stocks over the last few weeks.

All of this good news has kept the markets propped up. I expect that enthusiasm will continue over the very short term, but somewhere up ahead lies the possibility of a correction of up to 10%. That might sound like a lot (and it is), but those kinds of corrections normally occur once or twice every 12 months or so. We are overdue for this one.

“Should I sell now?” asks a client.

My answer depends on your circumstances. If you know that at some point over the next few months you will need to raise cash for college tuition, a new roof, an auto or other big ticket purchase, then it probably makes sense to take some profits now and make sure you have the money available for when you will need it.

On the other hand, if it is simply fear and greed spurring your desire to sell, I would advise against it. I have never met anyone who can consistently sell at the highs and buy back at the lows. The majority of times, those who try lose more money than they make.

“So I'm supposed to just sit here and take a 10 percent hit?" the client asks.

My answer is yes. The next thing longtime readers will point out is that over the past few years I have taken action on many similar declines. Why not now?

If I thought that something serious was lurking out there in the bushes, something that could drive the market down a lot further than 10 percent, then I might advise you to step to the sidelines. But I don't see anything like that.

Europe is recovering, not failing. The Fed is easing and the government appears to be getting its act together. Globally, I see more growth ahead. No matter how much I beat the bushes, I just don’t see the kind of dangers that we have had to navigate over the last few years.

There is no way of telling when a correction will occur. We could easily gain another 4-5 percent before it occurs and there is no guarantee that if it does occur it will turn out to be 10 percent. It could be less, a lot less. In which case, selling now will be an exercise in futility. My advice for most investors is simply weather the decline if it occurs. I have a strong feeling that the markets will ultimately make back any losses they may incur and then some.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


0 Comments
     
News Headlines
North Adams Happenings: March 4-10
Berkshire County Head Start Registering Children for 2015-16 School Year
Williamstown Housing Trust Awards Second Homebuyer Grant
North Adams Rent Board OKs Increase for Wheel Estates
Cheshire Asks Kinder Morgan For Information Presentation
North Adams Historical Commission Nixes Park Lighting Scheme
Hancock Suing Berkshire Wind Over PILOT Payments
Adams Sets Public Information Sessions on Electrical Aggregation
Pittsfield To Hire Extra Help For Pothole Season
Hancock School Committee Opens Conversation About Expansion

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (161)
Independent Investor (218)
Archives:
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (5)
Tags:
Housing Rally Currency Bailout Stocks Stock Market Japan Interest Rates Taxes Metals Europe Selloff Election Crisis Oil Greece Stimulus Commodities Euro Fiscal Cliff Pullback Federal Reserve Europe Energy Jobs Recession Economy Deficit Debt Banks Retirement Markets Congress Debt Ceiling Fed
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
@The Market: Full Steam Ahead
The Independent Investor: New Fiduciary Rule Would Benefit All of Us
The Independent Investor: How to Make the Most Out of Social Security
@theMarket: A Race to the Bottom
The Independent Investor: The Grecian Drama
@theMarket: The Labor Market Is on Fire
The Independent Investor: Joint Business Is Jumping
The Independent Investor: College Savings Accounts Are Not Risk-Free
@theMarket: More Stimuli Equal Higher Markets
The Independent Investor: The European Central Bank Delivers


View All
HV Girls into Western Mass...
After going into the locker room behind, 33-32, the...
Pittsfield Girls into Western...
Pittsfield advanced to the finals with a 66-52 victory at...
Princess Ball 2015
The Lanesborough Fire Association's 2nd annual Princess...
Girls BB: Middlesex @ PHS
The Generals rallied and rode an 18-point, 16-rebound...
Thunderbolt/Thunderfest 2015
The Thunderbolt Ski Race held its 80th anniversary run on...
Girls BB: Wahconah vs Hoosac...
No.1 Hoosac is heading back to the Cage as they beat No.9...
10X10 Art Party 2015
The 10X10 Festival's Real Art Party fundraiser, organized...
Berkshire Chamber Nite @...
Berkshire Chamber night on Wednesday at Mingo's in North...
Boys BB: Renaissance vs Drury
For Drury senior Justin Girard, the 63-61 quarter-final win...
Boys BB: Mount Greylock vs...
The Hoosac Valley boys basketball team got enough...
Boys BB: Quabbin vs...
Jerry McDonough scored 15 points, and Scott Steinman added...
Girls BB: Lee vs Mount...
Karli Retzel hit a 3-pointer and went 2-for-2 at the foul...
Boys Hockey: Wahconah vs...
The No. 5 Warriors won over No. 4 Belchertown 2-0 Tuesday...
Boys Hockey: Mt Everett vs...
Amherst No. 3 seed eliminated No. 6 Mount Everett 3-0...
Boys BB: Holyoke Catholic vs...
Monday evening, as the No. 5 Lenox basketball team was...
Congressman Neal Tours...
U.S. Rep. Richard Neal toured Unistress, Modern Mold & Tool...
HV Girls into Western Mass...
After going into the locker room behind, 33-32, the...
Pittsfield Girls into Western...
Pittsfield advanced to the finals with a 66-52 victory at...
Princess Ball 2015
The Lanesborough Fire Association's 2nd annual Princess...
Girls BB: Middlesex @ PHS
The Generals rallied and rode an 18-point, 16-rebound...
Thunderbolt/Thunderfest 2015
The Thunderbolt Ski Race held its 80th anniversary run on...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved