Dan Celia

Financial Issues

April 2017 – Q: I’ve been in cash for a long time, but now I’m hearing good news about the economy. Is it time to invest in stocks?

A: I believe the market shows great promise and will serve people well for an extended period of time barring any disruptive geopolitical event.

The main reason for confidence now is we have a pro-growth administration. Hopefully, that means Congress will pay greater attention to fiscal policy and do what is necessary to incentivize corporate America to add jobs to grow the economy.

That said, it’s important to understand that, no matter what you do in stocks, there is always the risk of loss. Therefore, I advise that if you have less than eight years in which you do not need to draw on your investments, you should not be in the market during a growing economy.

On the other hand, if you have a long-term time horizon, now would be the time to start dollar-cost averaging over the next six months, maintaining at least 20% in cash.

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Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (afr.net).

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