Set objective rules for equity market re-entry

Before selling, outline a clear, objective reinvestment strategy. Set specific triggers for buying back, such as a particular market level or a 5-10% correction

Buy low and sell high — isn’t that the mantra for making money in the equity market? The market is near all-time highs, so should you sell? As an investment advisor, I frequently encounter this question.

When a significant portion of your life savings is at stake, the question does not seem unfair either. The possibility that the current notional gains might vanish in a market correction keeps many investors on the edge.

My usual advice is to resist the temptation to sell unless your asset allocation necessitates it. A rising equity market can quickly push your equity exposure beyond allocation thresholds.