Sold My Stocks At Recent Market Highs, Recoup Value – Next Leg Down

Dow jones average as as of September 18, 2009

The recent stock market run up has seen the Dow Jones Industrial index go up from July at 8200 to currently 9800 points and the Nasdaq on the other hand has gone up from 1750 to 2130 points. That is quite a run for both the DOW and Nasdaq and as we head to the end of September and into October, I thought that I am going to sell now and take the gains in my holdings while I can…as October is traditionally a bad month for stocks.

I’ve sold AMD, NXG and GNW. AMD from July until now has gone from $3.50 to $5.88, NXG has gone from $1.99 to $3.07 and GNW has gone from $5.55 to $13.04. Now, it doesn’t take a genious to see that those are some super return on investment when we are supposed to be in a recession, and that is why I unloaded it all.

My feeling is this is just a wave, and it will come down again with the fact that there is not much fundamentals in the economy that is supporting this run up. Unemployment is still at all time highs and getting worse, where are the consumers going to find money to spend when they are pretty much tapped out. Consumers are choosing to save and pay down debt rather than spending on discretionary goods.

If I am not mistaking, the market will take a leg down in October, November then maybe we might get a Santa Claus rally this year. I will be watching the same stocks above like a hawk for the dip, and maybe get back in if the price is right. If, I am totally wrong the markets will go higher, taking the stock prices higher too, but hopefully not too much higher. Anyway, the rule goes you should never kick yourself for taking a profit.

Please read my disclaimer. Do not take this as advice, do your own due deligence.

Das Brain

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