It's the time of year, and that moment in a bull market, when investors start wondering whether to lock in some gains or let them ride.
I know firsthand of one financial advisor email saying, "Your portfolio is up nicely this year and the market's appreciation has made the asset allocation look pretty aggressive. Want to lighten up on equities?" And no doubt, this is one such note among thousands.
Meantime, professional managers who earn a cut of annual performance have incentive to trim market risk in December to preserve their take and sidestep any "tape bomb" — such as the brief air pocket on Mueller investigation headlines on Friday.
One trading-advisory service for institutions I follow has been spot-on bullish all year but counseled clients to "go flat" last Thursday — because technical targets set early this year were met and "this is the first time [in 2017] that sentiment is just too extended" as enthusiasm grew for year-end upside capped by a corporate tax cut.
This strategist also expects significantly more upside by the end of 2018, after what would amount to the biggest market shakeout since mid-2016.
So where does that leave the typical investor?
The weight of the evidence continues to suggest that no important market peak is nearby — the market almost always becomes more unstable before a major top is forming.
Yet logic and the basic rhythms of the market also tell you that less-generous market conditions should be expected to take hold before too long.