Quote:
Originally Posted by 68 stang
Yes Greg that all makes sense to me. I just have 2 more questions.
What to do when the FED raises the interest rate?
Would you sell your shares in a company if the management team starts to leave the company, and it has been a proven performer?
|
I'll do NOTHING once the FED starts to raise interest rates... because that would mean that the economy is IMPROVING so stocks will get a nice boost from that (MY GUESS ONLY SINCE WE DON'T KNOW). But maybe by the time the FED gets back to 2 or 3% -- I might start thinking about thinning (raising cash) so I can be ready to buy more bonds. BUT Remember that for most of you - you're on the 20 - 30 - 40 year plan... and steady and not moving around is what is going to work best for you.
If the economy is good - then you're stocks should provide you with growth and that nice dividend. Compounding that dividend is - over time - what works.
What most people do is buy at the top - and sell at the bottom - and then buy something else at the top and sell low etc. You really can't "time" the market or when it's going move - you'll always be behind the curve. SO for 99.9% of investors (including me) they're better off just staying where they are and putting NEW MONEY into the alternative (Bonds/CD's etc).
++++++++++++++
If the news is bad on a company - and the board is firing the heads etc because of it - I'd bail.... Otherwise you're gambling that the "new guys" can right the ship. I'd rather be in shares that don't have that issue.