Here we are—the middle of September—and things look good, real good. Equity markets are experiencing a strong late-summer recovery, with the Dow surging over 17% year-to-date; home prices are on the rise; inflation is under control; a war in Syria has been averted, and the economy continues to improve (albeit very slowly). As a matter of fact, last week’s 3% gain in the Dow was the best performing seven-day stretch since January.
Other than my ever-increasing waistline, I really can’t complain.
September also signals the end of 90-degree days and bathing suits and the beginning of crisp, cool, nights and backpacks. Fall is possibly the most defining moment of New England living, a season that brings foliage, football, and perhaps one of the biggest scams in the history of sales:
Now I like apple picking as much as the next guy. My wife, Marea, and I have gone several times with Taylor, and we always have a nice family day. However, what always escapes me is the notion that thousands of people pass by perfectly good local grocery stores (packed with cases of Mcintosh, Gala, Fuji, and Red Delicious for a $1.50 a pound), waste money on gas, happily pay $15 for a small bag of apples, and then volunteer to perform labor on the farm for a day.
What a concept! The farms actually get people to pay to work for them.
I suppose there is some personal level of epicurean satisfaction in picking fresh apples for your pie al-a-mode, but this transaction certainly favors the seller. Despite these extortive practices, people still return, year after year, for the privilege to work and then overpay for something that they purchase every week at their local market for less.
Let’s look at this in terms of a different market—the stock market. Would anyone hold or want to buy positions that are clearly selling at a premium? Of course not. Therefore, it may be prudent to closely analyze your portfolio to see if any of those ripened positions require fall pruning.
Additionally, we are nearing the latest Fed meeting and two serious politically self-imposed crises: a budget deadline in two weeks that could shut down our federal government, and a debt ceiling dilemma in mid-October which, if not resolved, could send global markets into a major tailspin. Let’s assume our elected officials have an epiphany and decide to work together. Do you believe they will quickly resolve these issues, or do you think they will pontificate until the last possible moment before finally kicking the ball down the field and scheduling a new crisis deadline? Sorry to admit, we all know the answer.
Therefore, with equities up over 17% and our politicians frothing over a new series of looming economic disasters, why not book some profits? I don’t have a crystal ball, but why make bets with your hard earned principal and a year of very healthy gains? Personally, I’m taking some money off the table despite the possibility that the market may continue to surge. My midsection may indicate that I’m a pig when it comes to food, but I’m not greedy when it comes to my investments. I’ve learned from experience.
I may actually take the family out apple picking with some of my hard-earned 2013 gains, as an apple a day should keep the doctor away without placing any additional strain on my waistline.
Have a productive week.
This update was written by Ron Mastrogiovanni and Chris Leone.
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