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Yes the markets are a bit like that at the moment. Take a look at the DOW:
click to enlarge
It has been range trading for close to a year and with little likelihood it will go far in the coming months. It seems, like many markets, it is fully priced at the moment. Well that is in the context of the current climate. A flight to safety or a global re-evaluation of the full range of assets as a consequence of a possible second dip recession will see all of a sudden a massive devaluation of global share markets.
But for now the fear of key European economies collapsing has eased and so pressure to the downside for equities has eased. But there seems little reason to push the market up at the moment. Hence the doldrums.
But be careful watching paint dry. Don’t fall asleep on the job or you can wake up and find a NUF on your hands – as per last week’s TTN. This is a time to do regular pruning – but in accordance with your documented plan.
Unless you are committed to a stock in your portfolio – then do something about it.
My experience tells me that many investors have a ‘floating’ approach to pruning. That is they are ambivalent about a lack lustre stock in their Port during ‘normal’ times but come abnormal times they ‘sell out for a song’. Always have a view about all stocks you hold.
So maybe quiet times – but you can put a part of your time to good use - pruning!
Enjoy the ride
Tom Scollon
Chief Analyst
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