Daily Commentary

MarketMinder’s View: Our recommendation to following the titular advice: Don’t. This article also cites a couple of individual companies, and as a reminder, MarketMinder doesn’t make individual security recommendations—we comment on this piece solely to address what we see as misperceived counsel. To determine when to sell a stock, this argument suggests using moving-average lines, which “smooth out daily or weekly trading activity to give a clear picture of a stock’s price trend. When closing prices move above the moving average line, it can signal when to buy or add to a position. It also acts as a sell signal to help lock in profits before a winning stock plunges and investors see their gains disappear. When a stock drops 2% or more below its 10-week moving average, that’s a signal to start looking for the exits.” The issue with moving averages or any other technical indicators: Stocks aren’t serially correlated, which means past returns don’t determine the future. Rather, stocks are forward-looking and care about the economic and political conditions affecting future corporate profits (over the next 3 – 30 months or so, in our view) and how those square with expectations. While we could write many pages about when to sell a stock, the main reason is if something fundamental has changed about why you own it. Selling simply because a stock fell (or rose) recently is backward-looking and often an emotional reaction—a mistaken reason to sell, in our view.

MarketMinder’s View: Social Security fraud involving the deceased has grabbed some headlines lately, but as this counsels, don’t overlook the threats to the living, either. A common tactic: Bad actors impersonating government officials to gain access to seniors’ benefits or personal information. “Often, these fraudsters will reach out via phone, mail, or email and claim there's a problem with your benefits. Or they may say they need to verify some information in order to ensure you continue to receive payments. Some tempt you with the promise of additional money, like a stimulus check, if you provide certain information.” Scammers also tend to push a sense of urgency in an attempt to get potential victims to act and share private data (e.g., a Social Security number). As difficult as it may be in the moment, keeping cool is critical. If a phone call or email is unexpected, hang up or don’t respond, and contact your local Social Security office directly to confirm whether a request is legitimate. Healthy skepticism can go a long way protecting your information.

MarketMinder’s View: This analysis highlights several “uncertainty” indexes covering a range of topics, from geopolitics to economic or monetary policy that blend together things like mentions of uncertainty in the media with things like trade or tax measures set to expire. And, predictably, it finds uncertainty is high today. “While there isn’t an unprecedented level of uncertainty in many of these areas (trade policy being a notable exception), uncertainty readings are close to extremes in quite a large number of policy areas.” Look, we will cede the ground that short-term uncertainty is elevated presently in light of inscrutable and hard-to-unpack tariff measures announced with great frequency over the past month. But these indexes are near useless in tallying it, given they largely either filter through media (which seeks clicks) or operate on biases like expiring tax measures being a key source. Furthermore, we would note that all this looks backward. The real questions for investors now: Is uncertainty likelier to rise or fall over the next few months? In our view, it is the latter—and high-but-falling uncertainty is the fuel that often generates recoveries from corrections.