A few thoughts as we close 2017

The markets have continued to trend higher with Dow flirting with 25,000. Investors who were fully invested in the market have had a very good run in 2017... 

Stock indices had one of the best runs  
  • Nasdaq Composite: +29.1% YTD
  • Dow Jones Industrial Average: +25.6%
  • S&P 500: +20.0% YTD
  • S&P Midcap 400 Index: +15.1%
  • Russell 2000: +14.1%
(courtesy BMO investorline)
As far I see, most good news have been baked into the market price such as Tax reform, interest rate increase, monetary policy revamp etc.. Unemployment both in Canada and in US is very low compared to a few years earlier..All that is now left is the fundamentals of individual companies.   

The market pundits are constantly warning that we have had a long bull run and the market is ready for correct in 2018...We need to think a bit different in the coming year and ensure that our gains are protected... 

Some actions you may want to consider are

1...Take base cost off the the investments and keep the profit portion on the market
2...Write covered calls (out of money) gets you some premium, pays dividend and gives limited upside in case the bull has legs still
3...Buy some puts to protect your existing position (this would cost you money but you need not action 1 above)
4...Reallocate your portfolio if you think your portfolio mix has changed since your last review
5...You may have sold some holding with a loss ... if that is the case take advantage of tax loss harvesting strategies  (see link below) 
6...Consider moving out of individual stocks that have had a good run and invest in ETF to spread the risk and still to take advantage of the underlying fundamentals
7.. Last but not least.. consult your financial adviser to review your overall financial health, and your present goals



Invest safely!!

Wish you all a very happy, healthy and wealthy 2018

Tax loss harvesting tips

Tis the Season for Tax Loss Harvesting | WisdomTree ETF Blog

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