So don’t let the mere fact that the market is up drive you away from owning the stocks of great companies with strong long-term growth potential. Instead, evaluate those businesses based on their prospects and current market values. If the stocks’ recent gains simply mean that the market is finally beginning to recognize those business’ true potential, then you would likely be doing yourself a favor by continuing to hold. If, on the other hand, you’re just nervous because the market is up, you might want to think again before raising cash. Over the long haul, the market has provided investors with solid total returns from compounding of both growth and dividends. That growth over time means the market has regularly hit new highs in the past — and continued to grow after hitting them.
Now is a great time to figure out what cash you need
Source napavalleyregister.com Regardless of what you end up doing, a new high in the market does give you a great opportunity to evaluate where your cash position is compared with what you really need it to be. If it turns out you do need more cash, you’ll be able to get away with selling fewer shares than you would have before at a lower price. If, on the other hand, it turns out that you’ve got the cash you need, then that’s a good thing, too. It should help boost your confidence to ride out any market volatility.
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