[imageframe lightbox=”no” style_type=”none” bordercolor=”” bordersize=”0px” borderradius=”0″ stylecolor=”” align=”none” link=”” linktarget=”_self” animation_type=”0″ animation_direction=”down” animation_speed=”0.1″ class=”” id=””] [/imageframe][fusion_text]

Stock Market at All-Time Highs

[/fusion_text][fusion_text]U.S. stocks are at or near all-time highs. Have you noticed? Does it make you nervous? Really, it shouldn’t. Do you know that when the stock market is at all-time highs, it is actually more likely to have a positive return over the next 12 months (compared to all other times)? Think about the past four years. The stock market has been at or near all-time highs most of the time. We still haven’t gotten that big drop.

If you work with anyone at Adam Smith Advisors, you know that we do not try to predict short-term market movements. Evidence shows that is a losing game. As such, you should not make big changes to your investment strategy based on any market forecast. i.e. you should not sell your U.S. stocks to guard against an imminent collapse.

If you’re still worried about stocks being overpriced, there are some things you can do on the margin that may look smart down the road. Here are our top ideas:

  1. Rebalance your portfolio by selling a little bit of U.S. stocks. This is really done more to make sure that you don’t take on more and more risk as the market goes higher and higher. We all know that markets go down from time to time. Use the proceeds to buy international stocks and/or bonds.
  2. Donate stocks to charity early this year. Many people who make charitable gifts of stock wait until the end of the year. Maybe it’s a good year to do it earlier.
  3. Take a big picture review and evaluate whether or not you still need to take as much risk to meet your goals. It may be that the good run in U.S. stocks has put your goals in reach. If you don’t need to take as much risk to get there, why do it?

All of those ideas should be incorporated into a comprehensive investment plan. These are not specific recommendations for you. We would need to have an in-depth understanding of your unique situation in order to do that. The ideas above are merely things to think about. Reach out to me if you would like to talk through any of them.[/fusion_text][separator style_type=”single” top_margin=”” bottom_margin=”” sep_color=”” icon=”” width=”” class=”” id=””][fusion_text]

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. ASA gathers its data from sources it considers reliable. However, ASA makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.