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To Sell or Not To Sell

To Sell or not to Sell; That’s the question?

We know that the stock market has been crazy and today is just another example.

Over the last month, we have seen the market up and down over 3%, but we are actually down only roughly 70 actual points. However, there’s a lot going on with taxes, Middle East, Infrastructure stimulus, crypto currency’s pullback, etc. Frankly, its just like most other news, but COVID is improving and the economy is getting more re-opened (I posted, what’s going on with the stock article) for even more insights.

What’s more unusual is the number of new people that we are meeting that are very concerned about the stock market, the current administration’s agenda, and taxes. The overwhelming questions revolve around selling to be “safe” on the sidelines, locking in profits, or selling real estate to take advantage of current capital taxes that may change

Personal financial planning starts with taking a full inventory, a personal assessment of where you are. You should be asking?

 Do I need the money? If I got it, what do I want do with it? Do I need more income? Am I willing to suffer a potential 10% correction?

If any of those have changed, then you probably need to reassess where you are and what’s it going to take to get back on track. In 35 years, I have always remembered “no one ever went broke taking a profit!” Maybe that impetus alone is worth taking a breather, or setting a mental limit or stop loss on what you are willing to lose 

I reminded of a situation recently where one of my clients had her IRA reach $700,000 and that was always the number that she felt needed. We discussed things and I recommended selling because the risks were too great that the market could have a correction, but mostly due to her uncertainty. We didn’t need to stretch for more return, accept those risks, when $700k was her magic number to do what she wanted!!  I discussed a strategy that locked-in her $700k account value and she replied, “this will allow me to sleep better at night!” In my years of experience, her feeling that made selling her current portfolio the best solution for her!!

If you are worried that further drops in the market will affect your income or current situation,

then it’s probably time to reposition. I always say, “if worrying solves anything, then do it all the time but it doesn’t!” Stop the emotional financial roller coaster and sell. It’s acceptable to keep your money liquid and safe while you consider solutions that will fit your needs better moving one has a crystal ball!

Some ideas to possibly consider might include:

  • Investing in some strong blue-chip companies with great track records of consistent dividends, looking for value and yields that fit your risk and goals. By diversifying into several different companies and industries, this may help reduce your risks further. 
  • Consider a split annuity concept with a portion of your money going into a Single
    Premium Immediate Annuity (SPIA) for income and the other portion growing in a Fixed
    Income Annuity (FIA) for growth purposes. These strategies give you some potential upside or higher lifetime, while eliminating any losses!
  • You can research higher-yielding corporate bonds, preferred stocks, Master Limited Partnerships (MLP’s), publicly traded REITS, UIT’s, etc. Look at management, balance sheets, track records, and investment profiles to determine what might work for you.
  • An Indexed Universal Life Insurance (IUL) can be designed for tax-free income and give you access to your money if you need. Best of all, a policy that includes living benefits for critical or chronic (long term care) might be really attractive.
  • Finally, don’t be afraid to get a second opinion as no one has a monopoly on good ideas! 

The Coronavirus created a lot of damage, uncertainty and isn’t finally over, but things certainly are improving! However, your broker’s or advisors simply telling you to “hang in there,” “this will pass,” or “it’s being overblown,” isn’t necessarily the one-size fits all advice in my books! It’s never a bad time to reassess, make sure that your goals and needs are still on track, if not then consider making any appropriate changes. 

To sell or not to sell it’s really dependent on you and where things stand for you!”

Pat Moran is a managing partner with Healthier Money and has 35 years of financial services experience. He can be reached at or (602) 571-1035

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