Being an avid investor for most of my life, I felt a bit of a thrill when the Dow powered through the 17,000 mark for the first time ever.
But is it really time to celebrate? It’s been over 1000 days without a 10% correction, so chances are there will be some profit taking going forward. The geopolitical issues with ISIS abroad, the US economy not as resilient as we’d like and our deficit continuing to grow at an alarming rate are major headwinds in my opinion.
On the other hand job growth is improving and corporate profits continue strong, so there is hope. Rock bottom interest rates, which are not expected to rise soon, mean that investors tend to seek the higher returns in equities despite the added risk, making yet another case for a good equity market to continue.
Given the markets and given that you may have a little extra time now that it’s summer, here are three things to do:
Review your portfolio allocation. This is a good time to consider reducing your equities (stocks) if you’re not comfortable thinking about a 10-20% decline at some time in the future. I’m not saying that will happen, but it could.
Review your entire financial situation. How long has it been since you updated your net worth statement, scrutinized your cash flow, checked your insurance coverage or reviewed your estate plan?
Grab your child or grandchild and get them involved in investing and learning about money. Make it a game and check out these resources: