Monday, June 19, 2006

Last chance to sell

If you think stocks are going to drop even more over the next year, you may wish to sell some of your holdings in 3-6 weeks based on the linked Volatility Index analysis. It's sad to see how much has eroded over the last couple of months, but keep in mind that a lot of the run-up in stock prices was speculation and made the stocks overvalued, so there's no entitlement to that price. Look at the fundamentals of your stock, and if it still shows a stronger price then what you feel it can deliver then sell when the time feels right over the next 3-6 weeks. Stocks should drop afterwards and give you a chance to buy back at a lower price, offsetting the regret of not having sold two months ago. You'll eventually have a chance to sell again at those earlier high prices, but not for a year or more.

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