I’m still in the “accumulation” phase of my financial life — I’m trying to add to my savings and investment accounts as aggressively as a I can, and keeping my eye out a couple decades to what my holdings might do before I retire. Assuming I ever retire. So my perspective is, I know, quite different from that of many of you in the great Gumshoe readership — I don’t know many of you personally, but I know from the demographics magically compiled by Google and the other internet overlords that our readers are, on average, older than I am and more likely to be retired or very near retirement.
So when folks ask me about sentiment, or about whether the market is going to crash, I have to tell you not only that I don’t know when this bull market will end (it’s getting a bit old, considering how long we’ve gone without a meaningful fall in the major averages — but we’ve also never seen an interest-rate environment like this, and broad market predictions are based on odds and guessing, so almost everyone will be wrong), but also that I have to actively try to make myself not predict the broad market.
I sit here as an individual investor, and I want more than anything to book profits on some of my better-performing stocks to raise my cash position further… or even, on my more frantic days, to sell 10% of every position to prepare for better buying opportunities ahead. The need to “do something” is like an itch, and it takes work to fight the urge to scratch it — and sometimes I succumb anyway, of course, even though my experience indicates that I have no great forecasting skills when it comes to what the market will do in the coming year, and that trading in and out of positions very often based just on the price or on the market sentiment that we can’t avoid absorbing from the media and from the ether, especially when I have no specific knowledge or thesis about the company that causes me to want to buy or sell, just increases the opportunities for me to be very wrong.
But sometimes, fundamental things jump into your attention that do force or suggest some sort of action. That’s what happened in the Summer of 2011 when I smacked ...