Hold Your Stocks and Hold Your Nose

The air is getting thin up here! I have preached about the pendulum always overshooting on the markets both on the downside and the upside. Well, here we are again overshooting to the upside. I know, I know … l have been saying a recession is coming now for two years. I forgot about the overshoot, obviously as all you here these days is that the Fed has engineered the soft landing and there will be no recession. Am I convinced of this? No, still not sold I am sorry to say and the next six months will be crucial to the end of this story. Yes rate cuts are bullish for stocks, but will the Fed follow through with more cuts (I mean what are they stimulating at this point?). Is inflation actually dead or will the Fed have to pivot and raise rates into next year to reverse course? There are so many moving parts to this economy it really does make your head spin. And to factor in what effect a war, where the US is dragged in, would have on things, or the port strike that is starting, makes the waters even murkier. Of course the press is mostly bullish because that is how Wall Street works. I’ve never been an ‘all in or all out’ kind of investor as I believe it is impossible to be even 50% correct on market timing at all times. This market is testing my patience though for sure as stocks just keep extending gains which makes it harder and harder to find value anywhere. It seems now anything you buy you are just renting the gains as markets will correct, even in this new social media, Al, driven period of time. Personally I am down to 40% in stock holdings and will be at 30% as this market drives higher. Am I missing out on gains? Yes, unfortunately. It is true that if you try to time the market you will lose more by missing the big gains before a correction than you will save by being out of the market waiting for the correction. But.. . .it does help one to sleep better at night so that is something to consider as well (I mean who loves to see large losses?). Disciplined investing in times like this, when markets are seemingly over valued, is one of the toughest things to stick to. Take a look at this video linked in the email this letter is attached to talking about markets and tennis. Just marginal returns consistently will make you a successful investor. Going for the home run is what causes below market returns for so many investors be it an over concentration in one stock or continuous trading constantly chasing the latest hot stock of the week. So hold you stocks and hold your nose as the pendulum swings ever higher to the right. Just have some powder ready to start the buying once the pendulum starts downward again. That will be a conversation for another day as buying stocks in a market that seems to drop every week may be the hardest thing an investor can do.