The time has come to make a change. The time has come to turn the page. The time has come to face the music. The time has come to step up. The time has come to take a stand.
Am I referring to politics? Ha! Not a chance. You can decide if the time has come for A New Way Forward or if the time has come to Make America Great Again.
The time has come… to sell some stocks. Or at least evaluate risk in the accounts.
The S&P 500 is at all time highs while we’re simultaneously facing several events that could have implications on our investments: the closely contested presidential election, wars in several places, and the Fed’s lowering of interest rates while trying not to stoke inflation.
We’ve been holding off on selling much the last few years, and we’re glad we did. The economy’s been able to weather high interest rates, profits have grown, jobs have been created, inflation is back in line, rates are dropping, and stocks have been rising, which has benefited everyone invested in them.
(Here’s a chart from Macrotrends.net showing stock market returns over the last 10 years. Not a bad run.)
But the time has come to sell some of those stocks.
Now, I’m not referring to SELL SELL SELL everything in the accounts like you’ve seen in movies. I’m thinking more like TRIM TRIM TRIM or SNIP SNIP SNIP.
Growth Stock Portfolio
We’ve already started trimming in our growth stock portfolio, selling Nvidia, which has grown to be an outsized position. We’ve been having conversations lately with clients about selling some of this stock and moving to a money market fund while waiting to invest until some event pushes the stock market back down again. We also want to “take out the trash” and sell some of the disappointing stocks like Zoom and Docusign.
Moderate Risk Funds Portfolio
In our moderate risk portfolio we’ve already been getting more conservative by selling normal stock funds and exchanging them with buffered funds that limit downside risk. These funds still capture upside when the market does well like it has the last few years. The trimming also gives us an opportunity to “take out the trash” in this portfolio and sell some of our underperforming funds.
The time has come to get more conservative and SELL. After the next dramatic headline, the time will come to BUY stocks once again. We’ll keep you posted when that happens.
Exciting News
We had some very exciting news recently! The newest member of our team, Lindsey Cason, expanded her family August 31st and had her first baby, Lydia Cason. Mom and baby are doing well and Lindsey will be back in the office towards the end of the year.
While Lindsey and Nolan are trying to figure out how to care for their first baby, Jeremiah and his wife, Alicia, are having their fifth. Yes, I said FIFTH! Please pray for them! Due date is in March.
It’s getting crazy around here and SMB may need to expand and start a daycare in one of our spare offices if this keeps up.
I’m the odd one out. My wife and I are not expecting, but it feels like just the other day we were. Our 2 year old, Charlie, is now the mascot of our family.
Until next time!
Thanks for reading,
Tim Porter, CFP®