Listen Live on  
 

News Radio 105.5 WERC

Birmingham's News Radio 105.5 WERC FM
 
 

Birmingham's Morning News w/ JT

Stewart Welch: Is it time to sell stocks?

 
Posted August 12th, 2014 @ 8:47am
S&P 500 is down 3.9% from its July 24th high (still up 4.5% YTD)
Dow is negative for the year -0.1%  (down 3.35% from its July 22 high)
10-year treasury = 2.44%; 5 yr = 1.62%
 
Short-term predictions = impossible to make
3-5 year time horizon = favors stocks….because:
·         Fed continues to provide economic stimulus (in form of 0%-.25% fed funds rate)
·         Economy continues to improve (although at an anemic rate)
·         Jobs improving (slightly)
·         Interest rates remain at historical lows….retirees not earning enough interest to pay their bills!
·         80 million baby boomers headed for retirement exits…they’ll earn 100%-300% more on dividend stocks than CDs, bonds
Spoilers: significant negative developments in middle east; other unknowables…
 
Recommendations:
For retirees: keep 5-10 years’ worth of cash flow needs in fixed income; balance in div paying blue chip stocks
Other investors:  use fixed income for expected short term cash needs + minimum of 6 mos cash flow in fixed income; bal in stocks
Stewart Welch, III, CFP®, AEP
Managing Member & Founder

The Welch Group, LLC

Recommended Stories

*