Profiteers never need an excuse - and neither do you

by Wayne Ferbert on April 5th, 2013

I promised Wednesday to write today about some income alternatives in the face of a rising interest rate market – but today’s market decline and jobs number compels me to delay that article to next week.
The sell-off today is improving a little bit in mid-morning but the market is down considerably. And it will likely stay here thru at least today. The March jobs number was weak this morning – only 88,000 non-farm payroll increase.  Many economists were predicting 200k new jobs – which would have continued the nice trend of the last few months.
After all, February came in at 236k and was revised to 268k today – which is a minor silver lining. The more concerning issue is that the unemployment rate DECLINED on the back of such a weak number. Huh? It happened because the total workforce declined – which occurs when people give up looking for work.
That is always a bad sign for your economy and the prospect for economic expansion. If the people on the front lines are throwing in the towel, that tends to be a bad omen.
So, the profiteers took over. The market has had a great run and is near its October 2007 highs. So, people took their money off the table. Profiteers don’t need an excuse – but the jobs number today gave them a good headline to move on.
Let’s remember – you need to be harvesting gains and losses all the time – especially the gains. Anyone that chooses to profiteer here should not feel bad about their move. It’s a natural response to this day’s headline.
Remember the importance of taking those profits. You want to regularly be re-balancing by taking money from your winners and investing in the losers. It is a key discipline in a strategic or tactical asset allocation plan.
Today is just profiteering but earnings season starts in about 10 days and it will last 6 weeks. It will be very interesting to see how company earnings fared when clearly the job market did not expand. In other words, if the profiteers had a good excuse today, wait for earnings season. These could be many more ‘excuses’ around the corner. You just don’t know.
One way or the other – think about harvesting gains in some fashion and be hedged. That will get you to your end goal. 

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