Last week the market started to show signs that it was about to release some of the gains it had seen since the start of this calendar year.
In fact, the major papers are now asking investors are they brave enough to sell their Blue Chip companies.
The mistake investors make after a strong bull run is that they feel compelled to sell shares and take profits. It is a mistake because they are not traders and this strategy will lead to low future growth.
The question when selling is, "when to get back in?" and most get his wrong indeed.
The question to ask now is “am I overweight in this company?” If so, take some part profits and hold the balance.
The blue chips are not going broke and continue to pay fat dividends.
In a world of low-interest rates, this means the value of these businesses is higher based on the dividends they are paying.
So yes, the market is going to pull back over the coming months. It is time to review your weightings. Take part profits where needed. Get any excess cash ready to be re-invested in the sectors, which will have the best growth in the coming years.
Make no mistake, the Bull Market has returned.