Ben Carlson has some tips on investing in highly-valued equity markets

Those who read this blog know I follow and respect Ben Carlson from A Wealth of Common Sense. He’s just posted a re-print of an article he had published in Bloomberg about how to invest when markets are “high.”

Key take-aways:

  • Rebalance from relatively high-priced equities to relatively lower-priced assets
  • Over-rebalance into equities that have performed relatively poorly in the past
  • Don’t get too complicated and try to chase sophisticated hedging or leveraged products
  • Raise cash to avoid selling equities during a correction
  • Diversify and dollar-cost average
  • Buy quality companies and hold for the long haul, even during a correction
  • Buy on momentum

Ben Carlson’s rationale for these points pretty much makes good sense to me. Read his article here.

Author: Michael

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