Time to take some profits on stocks? Interesting news
As the Dow Jones Industrial Average set a new intraday record on Tuesday, not everyone was cheering stocks higher. In fact, some investing pros were urging their clients to take some money off the table.
Buoyed by a housing recovery and an improving employment picture, the Dow rose to 14,254, exceeding an intraday high of 14,198.10 set in October 2007. Despite the good news, some financial advisers believe a correction is just around the corner. “The economic fundamentals in America don’t justify the markets being this high,” says Mark Grant, managing director at Southwest Securities in Dallas, Texas. He points out the U.S. economy rose just 0.1% in the fourth quarter of last year, indicating the current “recovery” remains fragile. Others worry the battle in Washington over budget cuts — including the so-called sequester law, which requires up to $85 billion in federal spending cuts over the next six months--will be a drain on any economic growth.
Not to mention the coming war in the Middle East, and instability of the Italian government & most of Europe. This market has been pushed up with smoke and mirrors, not fundamentals. Meanwhile, the price of everything has gone up. Remember the 200 point drop over Italian elections? Well, that still hasn't been settled, but we have conveniently forgotten about it for now. Very short attention span in this market. Bad news is forgotten a day or two later, as we have become accustomed to some sort of bailout to save us. Eventually, it all falls down.