New Highs, Now What?
The Dow is back to 26,000 and the NASDAQ hit 8,000 for the first time ever. When markets hit new highs I get asked the same question, can it keep going higher or are we about to crash? If you're interested in what these new highs mean for you, keep reading.
In July of 2007 the Dow hit 14,000 for the first time ever. It didn't hit 15,000 until May of 2013 almost 6 full years later. On the other hand, November of 2016 the Dow hit 19,000 and since then we've seen it cruise past 20, 21, 22, 23, 24, 25 and 26 thousand in less than two years.
The fact we've hit a milestone doesn't tell us what the future holds. It does let us know that we have an opportunity to make changes from a position of strength.
If you follow an asset allocation model, this is a great time to rebalance. The goal of these strategies is to reactively buy low and sell high. Record high sounds like an opportunity to sell high and rebalance.
It can also be a great opportunity to evaluate your target asset allocation. If you are close to or in retirement you might not want to take as much risk as you have been. The last two years should have moved you closer to your goals. If you don't need as much growth, why not shift some money toward stability?
If you've missed out on the stock market gains of recent years, maybe now is the time to adjust your strategy. Rather than looking at the stock market and trying to decide if it is the time to invest, look to your own assets. If you need growth to achieve your goals, it is time to invest. If you can't afford short term losses, then stay on the side lines.
You might be thinking, "I need growth and I can't afford losses". If that sounds like where you're at, give me a call. You might like working with me because I'll help you protect yourself today so you can celebrate all the future stock market milestones to come.
***Disclaimer*** Jake Carris Financial Planning does not sell any insurance or commissioned products. Investments are not guaranteed and contain the risk of loss. Speak to a financial advisor about your specific situation before making any investment decisions.