Newspaper article Sarasota Herald Tribune

Equities in General Are Flying, but Some Should Be Grounded

Newspaper article Sarasota Herald Tribune

Equities in General Are Flying, but Some Should Be Grounded

Article excerpt

Memorial Day is upon us once again, and for many it will just be a day off from work and a time to drag out the barbecue grill. Yet, as I point out each year at this time, the day should be a somber reminder of those who sacrificed their lives to ensure our freedom.

Unfortunately, the devastating effect of armed conflict has a way of fading from memory. Few are left who can recount the horrors of the Holocaust. A younger but graying generation pushes remembrances of the sickening-sweet smell of Napalm and burning flesh ever deeper into the recesses of their minds.

But the jarring sight of young soldiers with missing limbs should not only unleash a torrent of emotion but hopefully will act as a constant reminder of the seemingly never-ending violence that takes place across the globe in the name of peace ... and, oh, yes, religion.

You are probably wondering how these comments relate to investing on Wall Street. They do not, except to point out that Memorial Day is an excellent time to once again reflect on the phrase, "ask not what your country can do for you -- ask what you can do for your country."

Unfortunately, Wall Street's supercilious attitude is surpassed only by its unvarnished self-indulgence. Moreover, the financial largess that now floats freely within the temples of Wall Street is unlikely to ever make its way to Main Street.

Which brings us to the more germane topic that I also traditionally address at this time of the year: when to sell. Too often the subject is exploited with generalized and often erroneous phrases such as, "the market is going up, sell," or "the market is going down, sell."

Inflation remains benign, and interest rates are likely to remain low, according to congressional testimony Wednesday by Fed chairman Ben Bernanke. Add in an improving economy and it all points to a continuing rise in equity prices. Furthermore, Goldman Sachs wrote in a note to clients on May 20 that it sees the S&P 500 at 1,750 by the end of the year and expects a 12-month rally to 1,825.

Let me put it more succinctly: The cookie tray is going around, so grab a handful because you do not know when or if it is coming around again. …

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