Wednesday, March 01, 2017

Time for Investing Discipline

Despite numerous predictions of a market rout if Donald Trump was elected, the market has done exactly the opposite, rally about 15% since the election.    This totally unexpected market rally is giving me the opportunity to do some portfolio adjustments.  

Dispense with Losers.
First, I'm am selling some of the investments that have gone down or stayed flat.    If they aren't rising in this market, these stocks are probably dead money.  I sold most of our retail stocks.   I've sold some oil stocks.   However, I'm still keeping many of my energy stocks despite their stalled recovery.  

Trim the Winners.
I am taking profits in some of our winning stocks.  For most, I am selling a partial position, for a few, I am selling the total position.   Mostly, I have been selling off part of some of my biotech positions.  In addition, I am also taking profits by trimming our managed accounts to the minimum investment amount.

Identify Trading Opportunities.
There appear to be certain sectors and stocks which are taking off in short bursts.  I will experiment with buying small positions in these advancing stocks and then selling them after 10-50% gains.   This is purely a technical trading approach.  

Increase Cash for Future Buying Opportunities.
Some time in the future, the market will correct.   I will be ready to make some additional purchases in our core position, or adding more dividend paying stocks.

I don't sense a correction yet since there is little exuberance.  At the same time, I don't see a lot of conviction for this rally.     So we will continue to keep a base amount invested to participate in the rally, while waiting for correction to occur.

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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