The Dow Jones industrial average broke the 13,000-point barrier in February 2012, which was the first time that it did so since the 2008 crash. (As of press time, it was at 13,242.) This milestone is an indicator of market optimism.
But Walt Woerheide, who is a professor of investments at The American College, says for investors who engage in market timing (the strategy of buying low and selling high), this might be a good time to sell, because you want to sell when others are optimistic, as the recent rise in stock prices signals.
Why not wait for a higher milestone? Wojtek Zarzycki of Optimal Investing wouldn’t be surprised if many investors take profits off the table now as a softer outlook for growth in China’s gross domestic product and rising gasoline prices swirl about. Of course, you’ll forgo gains if the market continues to rise.