Last week, Wednesday plunged, Thursday pulled back and Friday fell at midday.
Unemployment is up, job creation is down, and both sides of the Washington aisle are focused on soundbites for 2012 instead of economic growth for 2011.
Investors cannot simply sit and watch.
Plan, don’t panic
This simple truth may sound trite, but investors must have a plan for all seasons. You cannot afford to react to what’s happening; investors must be prepared to thoughtfully respond.
If you don’t have a plan already in place, create one now based on intellect and not emotion.
Take some gains
Though the market is falling into summer, there should be some nice profits in your portfolio from the past two years. Sell some of those winners and hold the cash through the summer. June is historically the second worst month for investors.
Watch for leading sectors
Defensive stocks in sectors such as consumer staples, HMOs and tobacco have led the markets since mid-March, right after the Japanese earthquake. We expect a choppy early summer which will create opportunities for new sector leadership into July and August.
Be patient, but not passive
Investing is a long-term proposition, but just riding out the ups and downs is not the ideal strategy for investors, nor appropriate guidance from an advisor. For some of our clients, we’ve been raising cash heading into these summer months, while for others we’ve been rotating into more defensive/conservative asset classes.
Investors must be intentional with their assets by knowing what they own and why they own it.
D. DRUMMOND OSBORN, CFP is a 25-year veteran of the investment industry. He is president of Osborn Wealth Management, a local registered investment advisor firm delivering conservative asset management, and co-founder of RetirementProject.org, which focuses on educating and empowering individuals on retirement planning issues. Follow him on Facebook at Osborn Wealth Management, or contact him via phone or e-mail. He can be reached at 1-800-889-7401 or Drummond@OsbornWealthManagement.com.
