Shades, Re: "Tax Reasons" All that depends on the circumstances. I know people, elderly folks mostly in their 70"s or older, who own shares of KO or PG they bought back in the 1970's and their cost basis is only a dollar or two per share so if they sell they get hit with a really big tax bill. And most all these blue chips have had so many dividend increases over the years that the dividends provide them with income for living expenses. I hated to sell MRK Friday, would have rather held as it pays a really nice divvy and I had a solid gain but it seemed like the market didn't like the new CEO so I got out. I may re-enter later though.
These guys like Phil or Kaultbaum don't know either, they are just guessing though I pretty much agree with them. The main problem is that it is about time for a bear market, stocks have been going up for over two years and that doesn't go on forever. On the other hand it doesn't seem that the country is in a recession or even heading for one anytime soon. After 2000 I figured the next decade would be like the 1970's or worse; we are halfway through the decade and it just hasn't happened. There is bound to be a recession coming, maybe next year or 2007. At the first real signs of that I think the market will really sell off but we are not there yet. There has already been a pretty big decline, especialy since early March and as these things do not go in a straight line I think it could be time for something of a rally. I'm betting a small amount of money that way, anyhow. I don't expect it to last though. 2%+ would be good, then sell. Keep your cash level high as things will be cheaper later.
The market could do anything including go up. A million things could cause a big rally. Oil go down, catch Osama, Iraq improvement, an new series of sucessfully "cooked" numbers from the government. Literally anything could cause a big rally.
I listened to Kaultbaum's radio show alot back in 2002 and he was more bearish then than he is now. Of course that was the very time to buy, at least the right stuff. Some stuff I bought then I am sitting on doubles or better. If I had been as bearish as he was I wouldn't have those gains. You have to be careful with the "gurus". Its fun to listen and sometimes you get ideas you can use but don't take them too seriously.
Slagle |
