Is it Time to Take Some Money Off the Table?

Wouldn’t it be nice to be able to lock in your “winnings,” particularly at the end of a long bull market? You know, take some money off the table?

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The problem is… what do you do with the money then? Hold cash? Invest in fixed income? For how long? When do you put it back on the table?

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If you’ve done well with a particularly risky investment, it might make sense to take the money and run. Think Bitcoin in December of 2017 when it was worth nearly $20,000 a coin as opposed to less than $4,500 today.

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Is it Time to Take Some Money Off the Table?

Timing The Market

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I’m not sure I need to go over why this is a dumb idea, but the difficulty with market timing is that you have to be right not once, but twice, and you have to be right by enough to overcome the transaction costs including taxes and the value of your time.

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The Wealth Effect

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[{"selector":"#anim-1f0bf919-0a5c-4890-b8f3-dd543d2f0595","keyframes":{"transform":["translate3d(105.23416%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-6335955f-6ae0-4ab3-8e92-a881d166ff09","keyframes":{"opacity":[0,1]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-47ef935e-10d4-44e1-9040-b241c6d936e1","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] However, it is important to remember that you’re not really as rich as you think you are in a bull market (but neither are you as poor as you think you are in a bear market.) “Mr. Market” has some rather volatile moods which even out over the long term for the patient investor. Read More

Most investors will want to decrease the “shallow risk” (volatility) of their portfolio as they approach retirement to reduce sequence of returns risk.

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It seems wiser to make that sort of an asset allocation change a few years into a bull market rather than after a recent 30% drop. Isn’t that market timing too?

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Play Money: Invest AND Have Fun!

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Is it Time to Take Some Money Off the Table?

Wouldn’t it be nice to be able to lock in your “winnings,” particularly at the end of a long bull market? You know, take some money off the table?

The problem is… what do you do with the money then? Hold cash? Invest in fixed income? For how long? When do you put it back on the table?

If you’ve done well with a particularly risky investment, it might make sense to take the money and run. Think Bitcoin in December of 2017 when it was worth nearly $20,000 a coin as opposed to less than $4,500 today.

Is it Time to Take Some Money Off the Table?

Timing The Market

I’m not sure I need to go over why this is a dumb idea, but the difficulty with market timing is that you have to be right not once, but twice, and you have to be right by enough to overcome the transaction costs including taxes and the value of your time.

The Wealth Effect

Most investors will want to decrease the “shallow risk” (volatility) of their portfolio as they approach retirement to reduce sequence of returns risk.

Being Wise About Asset Allocation Changes

It seems wiser to make that sort of an asset allocation change a few years into a bull market rather than after a recent 30% drop. Isn’t that market timing too?

SWIPE UP NOW TO READ MORE

Play Money: Invest AND Have Fun!

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