Zacks highlights commentary from People and Picks Member «MightyMo».
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Stage 3 of the Bull Market: Are You Ready?
“Sell in May and go away” is a conventional saying that it NOT applicable this time around.
The better one is “Don’t Fight the Fed”. The Fed is absolutely determined to ‘make’ the market go up. Do not expect any interest rate increases this year!
The first quarter was a mess with all the disasters and world unrest and debt issues and yet the market continued it’s climb. Don’t expect the 2nd quarter to be as bad with world-wide disasters as the first and follow the FED’s lead.
We called the first two stages of the bull market. We came in on the market in late March 2009. We called a second stage of the bull market in Sept 2010 and now we’re confirming the third stage today(Apr 29). It actually started on Tuesday, Apr 26 with the DOW at 12553.
We’ll have some turmoil, we’ll have some very minor corrections, but overall it’s a BULL MARKET. This market has legs….
That said, it’s different than it was two years ago. One needs to proceed with more caution than in the last two years when it was easy pickings to buy stocks with strong momentum and let it continue. Today one needs to get some of the profits of the last two years and put them in safe and solid companies that have a good track record of paying decent dividends. (see post ‘ “A new Focus, a different Direction”).
Your portfolio needs to be a mix of super-growth stocks and low-beta high yielding safe stocks. One wants to continue to profit but also to ‘preserve capital (profits). One needs to take ‘a little off the table’ when it appears a minor correction is immiment.
One needs to apply good management techniques and adhered to in-the-box market wisdom such as’ never let a profit turn into a loss’ and ‘cut any losses short – your first loss is your best loss’. If a stock takes off, take a little profit. In the overall bull market, if your security is climbing but takes a small dip, buy a little while it’s on sale.
It’s the beginnig of the third leg of this wonderful bull market. Oil is a concern and might not peak until July. Follow the trend and keep making money. However, be prudent and use good sense in your portfolio trading…
Those who taut ‘gloom and doom’ will continue to do so. It will only help you. Don’t listen to them. Where would you be if you listened to them the last two years. They help you to keep the market on an even knell.
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