All-Time Highs – Be Careful

An excerpt from the September issue of 2 for 1.

“The major stock market indices, the 2 for 1 Index®, and the 2 for 1 newsletter portfolio have all hit all-time highs repeatedly over the last few months. Every time this happens we congratulate ourselves on how smart we are to be invested in the stock market. I, like everyone else, get a warm fuzzy feeling when the number at the bottom of the column grows to a new, higher level. However, I am also careful to remind myself that our 10.7% annualized growth has not been in a straight line. The dot-com bust and the 2008 financial crisis are sobering examples of the downside of stock market investing. The current bull market is one of the longest in history, and I’m writing today to say with some certainty, something bad is going to happen and the bull market will eventually come to an end.”
“I would be foolish to predict the timing of the onset of the next bear market and, because of the fully invested nature of the 2 for 1 strategy, I’m not planning any changes in 2 for 1’s monthly buy/sell routine. However, I would be remiss, as your newsletter editor, if I didn’t remind my readers that 2 for 1 only concerns the equity portion your portfolio. Everyone’s financial situation differs and asset allocations will vary accordingly but, with emotions and market uncertainty being pumped up by the coming election, I recommend a review of your overall financial situation. This review should be bracketed by the assumption that your stocks may be taking a hit over the coming months.