Time To Sell ALL Your Stocks???
Mar 15th, 2008 by Nut
My daily readings usually include MSN Money and Yahoo Finance, with the occasional romp over at USA Today’s Money page and Morningstar. And those places usually offer the type of commonsense advice I agree with. Sometimes they’ll put something up that’s a little different or new, but for the most part I agree with the majority of what’s written there.
So I was surprised yesterday when I came across this story by Jon Markman on MSN Money. I’ve read his stuff before but and don’t really remember any of it being memorable, but this one I know I won’t forget any time soon. The title is “Sell stocks while the selling’s good.” I figured this was wordplay or something to lure me in but nope—he’s saying the market is probably going to take a further dive and that, if you can, you should sell all your stocks ASAP. No wonder investors get so confused: half the world tells them to hang on to their stocks and buy more while the other half is saying the opposite.
I don’t know if Markman was trying to write something controversial to get some play, but if that was his intention he is most certainly getting that play right here. I know this advice is totally different if you have stocks in your retirement account—I’m assuming he’s not including those stocks because if he is this advice is terrible. If you have a brokerage account and you don’t use a long-term strategy, maybe this advice could apply to you, but I’m still highly skeptical.
How many times have we heard it over and over again? “You can’t time the market.”
Markman is basically saying that he can. He isn’t saying this is the top or the bottom, he’s saying it’s going to go down even further. Is he going to tell us when the bottom is here so we can put all our money back in? I doubt it.
I’m all about writing something controversial that elicits a discussion, but this just seems outright irresponsible and contributes to all the “bad comments” about people who write about stocks and equities.
You want my advice? The market is down so buy more if you have enough non-essential money hanging around. Don’t dip into your emergency fund and don’t borrow any money (not that anyone will lend you any right now) to do it, but if you can, go for it. Otherwise, hang tight and read a book or something. Think about something else and don’t follow John Markman’s advice.
Open an ING account and get a $25 bonus!
As much as I know (logically and rationally) that my stocks will eventually go up, I have to admit sometimes it’s hard to see the long-term benefit in light of the right-now losings. Sigh.
That’s why crazy advice like Markham’s is likely to fall on willing ears. We’re all a little weary.
Nonetheless, I agree with you and hope for the best, eventually. I’m hanging in there, trying to be patient and trusting that over time things will go up.
GG, I bet you feel better after yesterday. The 4% lift the market got yesterday is the perfect example of why no one can time the market. If you were out you missed a 4% spike in one day.