Brains or Bull Market?

"Don't confuse brains with a bull marker."~Wall Street adage

After a dismal December (and November) in 2018, the stock market has rallied with a vengeance.  January 2019 is the best January for the S&P since 1987.   Our accounts are up significantly this month, with several accounts hitting all time highs, despite the overall market still below all time highs.  Some of our stock purchases on Deceember 24, 2018 (now officially the near term bottom of the correction/bear market) are up over 30%.

Despite all this good news, I'm not feeling particularly brilliant.  In fact, I just feel lucky that it's still a bull market and we are reaping the rewards of being a participant.   Basically, we were most lucky with our contrarian buys.

Here are our lucky buys:

• REITs - In early 2018, we started buying REITs, which had fallen precipitously  in late 2017 and early 2018 due to expecte Fed interest rate increases.  Some of the REITs were yielding as much as 7%.   It was a painful process since all of the REITs continued to fall as were were buying the over a three month period.  However, the strategy paid off as the REIT only account has shown a 26% increase over a year.  REITs owned:   WPC, O, NNN, LTC, VTR, HCP, GLPI, STAG and KIM.
• December buys -  Despite the falling market in December, we added to our market index ETFs and bought trading positions of our core holdings.  Some of the index ETFs are up over 15% and some stocks are up over 30% since their purchase in December.

It didn't hurt that my company stock hit a new 52 week/all time high in January.

Bottom line is that I feel more lucky than smart.  So I am selling into this rally.   First I am selling any trading postions that have over 15% gains.   Second, I am trimming successful core positions (e.g. REITs) to take profits.

If the bull market continues, we will still benefit with our core positions.   If the bull market pauses and declines, we will have taken some profits.

Disclosure:  At the time of posting, we own WPC, O, NNN, LTC, VTR, HCP, GLPI, STAG and KIM.

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This is not financial, or investment advice. Please consult a professional advisor.

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