Pulling the trigger

My family and I used to produce a television program called Cast and Call Outdoors. It aired on the WPGX Fox 28 station out of Panama City on Sunday mornings, and our 13-year-old daughter, Whitney, was the host. We traveled a good bit and filmed our hunting and fishing expeditions around the country.

On an elk hunt in Colorado our guide was Dan Harrison, and he spoke about his calling to teach young people all over the country the importance, benefits, risks, and impact of hunting – and of pulling the trigger on a gun. He made a great point with us when he said, “Kids today do not realize the permanent consequences that some actions create. Young people today are so accustomed to hitting ‘reset’ or ‘new game’ on their video games, and they don’t realize that in the real world when you pull the trigger on a gun, someone or something is going to die.” When a trigger is pulled, there is an impact and consequences.

Pulling the trigger in the investment world can occur in two ways: when you buy an investment or when you sell an investment. Both actions make an impact, but, unlike pulling the trigger on a gun, the ramifications are not necessarily permanent.

First, pulling the trigger to sell an investment can be normal, prudent, and appropriate. The best time to sell is when there is an unrealized profit. But, selling when an investment is below the purchase price can also be good. I agree, no one likes to sell at a loss, but, it makes absolutely no sense to wait on an investment to return to a profitable position simply for that reason. There is no guarantee that it will recover its value. 

The only decision that needs to be considered is: “Where is the best place, based upon what I know today, for the value that is in this investment and for my timeframe?” If the value would be better off elsewhere, make the change. Pull the trigger. There may be tax benefits for making the sale at a loss, and there certainly may be better investment potential going forward. A lot of times, an investment is “underwater” for a reason, and it could continue going lower. And… one can always repurchase the investment if and when situations seem appropriate.

Second, pulling the trigger to buy an investment can be difficult. Over the last 20-plus years, I have seen people think themselves into a corner, frozen in “analysis paralysis.” I’ve learned how to help people avoid this condition, how to help people out of the situation (there’s no magic pill), and how to get past the damage that the indecision cost them. It’s hard to miss a good buying opportunity only to watch the investment move up in value to a price that seems unaffordable.

With that said, and with the S&P 500 (an unmanaged index that cannot be invested in directly) at around 5,500, my firm and I feel that the remainder of 2024 could be fairly bumpy (volatile) in the stock market due to U.S. election uncertainty, geopolitical concerns (Israel, Russia, etc.), and the U.S. economy/ inflation/ interest rates. So, what should one do with cash – especially if and when interest rates start to decrease? Pull the trigger by seeking good advice from qualified advisors – tax, legal, and financial.

Gulf County resident Walter L. Woodrick is a certified financial planner practitioner, and author of two books. His website is WoodrickFinancial.com, and his text number is 850.724.1369. Securities and advisory services are offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. #603962-1