332. Whoa There - More market Advice

"Don't get mad at Wall Street, get even" revisits a know end-of-the-year phenomenon. Yes, there is usually a sell off of "bad" stuff to dress the books before the annual report comes out. But, is the bad stuff ALWAYS stuff that will be good within a month as this article states for M.r Putnam's picks? I say not. However, I would venture to guess that Mr. Putnam scrapped his bad and picked up things that either grew even better or maybe were safer. Remember, once-a-year portfolio dressing is ALWAYS a must; not necessarily to scrap the worse performing, but to REBALANCE the portfolio for diversity and your life style/age. Mutual funds need to take into consideration the balancing of risk. They also need to consider the new, FULL year's objectives and design a portfolio to fit it. They therefore need to shun a new dress, meaning they need to change the portfolio and scrap something. Do you scrap your winners or losers? Duh! Another consideration is whether you pass capital gains through to the holders (THEY pay the taxes) or sell losers and not pass gains (or losses) through. So, don't get excited that there are treasures thrown away for your pickings. Hold on to your methodology of stock picking first. If anything in the list passes those tests, then BUY.

We are still edging towards the 12200 resistance stated in #324. The Mutual Fund redressing SHOULD take effect so and knock us back a little. But, acknowledge what is causing the drop. Also, note that computers set to trigger at a certain level do NOT consider everything and usually cause the market to drop more than it should. That's BUY TIME.