This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 Stocks to Sell, 2 Excellent Strategies

Stocks in this article: VZ EWC WEN BCE RCI

NEW YORK ( TheStreet) -- At the ripe old age of 36, I scoff at the notion of "sitting in cash." You hear so many people say that in all different types of market environments.

The market rallies. And the worriers "sit in cash" because they expect a pullback, crash or correction.

The market moves wildly. Uncertainty breeds anxiety. Anxiety hates uncertainty. Time to sit in cash.

The market crashes. It's just too much to stomach. I'm in cash.

These erratic movements treat investing like an uncertain exercise based on intuition, rather than the long-term systematic plan of attack it should be. It's difficult to achieve goals if you're not anywhere near sure what you'll be doing tomorrow. You cannot let the stock market's gyrations dictate how you invest, particularly if you have a long-term time horizon.

In many ways, I run my portfolio like a business. Like a start-up. Head down. Tunnel vision. Pound a beer or two upon incremental victories and immediately get back to work. Ignore the haters. Dismiss the noise. Don't hang with the fearful.

Sitting in cash equates to trying to time the market. Long-term investors should probably never time the market. It's a fool's game. In fact, it's typically far more dangerous than a day trader timing the market. At least a day trader, if they're credible, employs a system based on objective markers such as technical indicators. When long-term investors go to cash, it tends to be an emotional reaction to something temporary. Reentry into the market takes place when you "think" it's about to go up. That's timing the market.

I don't understand why investors, unless they require access to their cash soon, don't just simplify the process by doing two things:

  • Creating a monthly budget; and
  • dollar cost averaging.
  • Each month, on a Post-It note, I estimate how much money I expect to take in. It takes 10 minutes or less to determine how much cash I will put out for expenses. I put a little extra in the "whatever" category, which includes random, unexpected and entertainment. I pay the freaking IRS. I put around the same amount into a regular savings account. Every remaining dollar goes toward my investments, ranging from speculative plays to long-term buy-and-hold to several Dividend Reinvestment Plans.

    1 of 3

    Select the service that is right for you!

    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!


    DOW 17,804.80 +26.65 0.15%
    S&P 500 2,070.65 +9.42 0.46%
    NASDAQ 4,765.38 +16.9840 0.36%

    Brokerage Partners

    Rates from

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs