Lately,the market seems to be having a lot of activity, but little movement in total value of our accounts. When one sector goes up, another sector goes down, resulting a wash. Lately, material, gold and utility stocks have been falling, while oil stock are rising. This is just the opposite of what was occurring a few months ago.
Based on this activity, I will start taking trading positions in some of our core equity holdings. That way when the stock rotates upward, I can take some profits and repurchase the trading position when the stock falls. However, I will only trade shares in excess of the core position amount. That way when the market resumes an upward trend, the core positions will all benefit from the market advancing.
For more on The Practice of Personal Finance, check back every Wednesday for a new segment.
This is not financial advice. Please consult a professional advisor.
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