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Okay, I don't usually like to talk about money and I do try to avoid patting myself on the back. But...
A couple of weeks ago, I looked around and noticed that the stock market was doing pretty well. In particular, the phrase "all-time high" (in reference to the S&P 500 index, in which I have a good chunk of my portfolio invested) caught my attention.
I thought that was cool and was ready to just move on. After all, I've no need of the money at the moment and stock prices are path-independent. All that matters is the price when you buy and the price when you sell. Anything in between makes no difference.
But then I thought of something which should have been painfully obvious: I can sell off some shares now, hold on to the money (or move it somewhere else), and then (if I want) buy back more shares after the price drops. (So when it goes up again, I'll have more than I otherwise would have.) You have to pay taxes on the sale, but if the value is at its peak, it's worth it to take advantage.
So I put in the orders. Sold off some shares of my more volatile funds. Not all, but a reasonable chunk. I'm still shuffling the money around a bit, but soon it'll be in more conservative funds. Bonds, mostly.
That happened in the middle of last week. Sales went through Thursday morning.
Thursday and Friday, the market went up some more. Oh well. What can you do? It's been on an uptrend for a while now. But the important thing is that, sooner or later, the bubble will burst. If I sold a little early, well, at least I still sold while the value was pretty high.
This week... The bubble burst. Value is still pretty high, but there's been a sharp decline:
(That's from Yahoo Finance. I'm not happy with some of the things Yahoo does with privacy, email, and tracking cookies, but they've got some very handy free stock services.)
See that last vertical line, right where the market hits its peak? That's Monday, June 4. I sold my shares on Thursday, May 31. The other funds I sold off do pretty much the same thing.
Bam! Two business days before everyone else, I cashed in. Took a chunk of the money and ran. Two days. W00t!
A couple of weeks ago, I looked around and noticed that the stock market was doing pretty well. In particular, the phrase "all-time high" (in reference to the S&P 500 index, in which I have a good chunk of my portfolio invested) caught my attention.
I thought that was cool and was ready to just move on. After all, I've no need of the money at the moment and stock prices are path-independent. All that matters is the price when you buy and the price when you sell. Anything in between makes no difference.
But then I thought of something which should have been painfully obvious: I can sell off some shares now, hold on to the money (or move it somewhere else), and then (if I want) buy back more shares after the price drops. (So when it goes up again, I'll have more than I otherwise would have.) You have to pay taxes on the sale, but if the value is at its peak, it's worth it to take advantage.
So I put in the orders. Sold off some shares of my more volatile funds. Not all, but a reasonable chunk. I'm still shuffling the money around a bit, but soon it'll be in more conservative funds. Bonds, mostly.
That happened in the middle of last week. Sales went through Thursday morning.
Thursday and Friday, the market went up some more. Oh well. What can you do? It's been on an uptrend for a while now. But the important thing is that, sooner or later, the bubble will burst. If I sold a little early, well, at least I still sold while the value was pretty high.
This week... The bubble burst. Value is still pretty high, but there's been a sharp decline:
(That's from Yahoo Finance. I'm not happy with some of the things Yahoo does with privacy, email, and tracking cookies, but they've got some very handy free stock services.)
See that last vertical line, right where the market hits its peak? That's Monday, June 4. I sold my shares on Thursday, May 31. The other funds I sold off do pretty much the same thing.
Bam! Two business days before everyone else, I cashed in. Took a chunk of the money and ran. Two days. W00t!
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See ya,
Anna. :)