The S&P 500 is up 200% since the March 2009 Lows- What to Do Now!
I have a colleague who sent me this email. I thought to share it as most investors I believe will get it wrong…
The S&P 500 is up 200% since the March 2009 lows.
That’s great if you’ve been fully invested since then, but let me ask you one question…
When do you ring the register?
Now? What if stocks keep going up?
When your buddy at some fancy bank or hedge fund tells you to?
Never because you “believe” stocks always go up and you’re “in for the long-term”? How’d that work out for your parents in 2008 and 2000? Both times, they took 50% drawdowns.
From 2000-2013, stocks went nowhere – earning people no money. None.
What if stocks start falling? Do you sell when they drop 10%? 20%? 30%? 40%? 50%?
Most people have no idea when to sell. Most people never sell. They don’t want to think about it or take the 20 seconds to click the two buttons in their Schwab account to protect their money. So, they get pummeled and frantically watch CNBC for answers.
Don’t be these people. If you have an advisor, ask him what the plan is. If he doesn’t have a good answer, fire him ASAP.
If you invest directly in a hedge fund, ask the manager what the selling procedure of his strategy is. If he doesn’t answer clearly, bust a move outta there. He probably doesn’t have one.
Having a selling plan protects you when the sh*t hits the fan.
It’s that simple.