Squeezing the last drop out of your investment?

Home » Blog » Investment » Squeezing the last drop out of your investment?
dandelion
When should you calm down your investment?

I get two questions from my clients when it comes to investments at the moment. Either “What can I buy/switch to get the returns everyone is talking about” or “I hope you’re going to tell me when to sell down.”
The general consensus is the stock market is ‘over valued’ but there isn’t a unanimous consensus that it’s about to tank. For over 5 years it has been rising like a feather (with a strong undercurrent) with a few wobbles. We all know – it can sink like a stone in days or weeks. The right time to buy was probably early 2008, but you had to have steel you-know-whats to be that contrarian. When the world and it’s brother, your neighbour, his dog and mother-in-law are all piling into the market – like now – guess what? It might be time to take the profit off the table.
Why is the All share steaming ahead when the economy isn’t. Logically one would think that until earnings get back to the glory days pre-2007, then the stockmarket should lag, but that isn’t the case.

The big boys in our stockmarket – the Anglos, Billitons, SAB, Richemond, MTN etc are heavily invested outside of SA, so their shares are going to mirror the global economy – not the South African one. The global market continues to recover, and the low interest rates in the West will keep money pouring into stocks. Maybe we can hang onto those coat tails a while longer. Maybe it’ll keep us sailing along until the economy catches up.
So sell? Buy? Hold? The most important questions to ask is whether the investment is short/medium or long term( over 8 years), what percentage it is of your overall net worth and whether you have the time to allow an investment to recover a significant loss of capital. If you’re coming into retirement and not going to be accumulating more funds – perhaps it’s time to lock in that profit and hedge the downside. If you’ve got 20 years to retirement and don’t need the capital for at least 8 years then maybe not.
I am going to repeat something I have said before in my blogs… The bulls win, the bears win, it’s the pigs that lose.

Author Dawn Ridler  

Related Posts
Savings and Social Media
Saving is silent, consumption is conspicuous At the most basic level, the only way to grow wealth is to earn more than you spend and save the rest. If you can ...
READ MORE
Not Negotiable!
Is bartering an option? Here in South Africa, like so many countries in the “west’, we are so used to the price being not negotiable, that we often give up trying. ...
READ MORE
Get Poor Quick
Self-Sabotage Most of us are immune to being conned by the 419 scams and phishing that we get bombarded with every day, but what about the self-sabotage that can decimate your ...
READ MORE
Property mogul or moron?
Playing musical houses? For most people, their home will be the biggest asset in their estate. At retirement the retirement fund should be larger – but often isn’t. When it comes ...
READ MORE
There’s a hole in my bucket – Money Flow
The ebb and flow of money Money isn't static, it flows in and it flows out – if you can manage that effectively then you’ll master the key to personal wealth. ...
READ MORE
5 ways to beat the recession
Survive or even thrive during a downturn The economy has been slowing down for over a year now, and the threat of a recession is a very real possibility. Post 2008 ...
READ MORE
Is ‘Lifestyle Creep’ killing your wealth?
Do you recognise this in your budget? Lifestyle creep a hidden effect, especially in higher inflation environments like ours. Basically, it is the continuous upgrading of one’s lifestyle and increases in ...
READ MORE
Group Benefits – Before you kick them to the curb when you change jobs…
Intro When you leave a job for a new, better one, most of your focus is usually on the new venture and you can’t wait to get out of the existing ...
READ MORE
What ith a LISP?
Why you should be using a LISP platform One of the worst things about the financial industry is the use and abuse of acronyms. They are often used to make it ...
READ MORE
Retirement reform: Full blown collywobbles
Retirement reform - kicking the can down the road Since a recent blog HERE, where I tried to decode the facts, rumours and proposals in the retirement reform arena, the whole thing ...
READ MORE
Savings and Social Media
Not Negotiable!
Get Poor Quick
Property mogul or moron?
There’s a hole in my bucket – Money
5 ways to beat the recession
Is ‘Lifestyle Creep’ killing your wealth?
Group Benefits – Before you kick them to
What ith a LISP?
Retirement reform: Full blown collywobbles
in Investment, Uncategorized, Wealth Ecology Comments are off