Get Off the Margin and Lock in profits

In “The Big Picture” article in this Saturdays issue of Investors Business Dailey, journalist Jonah Kery wrote “It’s prudent to get off of margin, cut any losses and focus on a few exceptional leaders, assuming they are acting reasonably well and you have a sizable cushion.” Jonah’s sentiment echoed mine precisely this week as I not only got off of margin in my brokerage account, but I downright liquidated every position in the account. After returning from a long meeting and finding the holdings in that account had taken an 18% swing lower from a being up 10% at the opening, I sold with abandon. In fact I was so busy entering sell orders I actually sold one position of 400 shares twice and found myself 400 shares short which I immediately bought back at a small loss. Many of the stocks I sold in my margin account I also own in retirement accounts or are in accounts I manage for others and we’ll hold them unless this market just falls out of bed so to speak. Later that day I went on line and requested a bank transfer of my profits. Now I'll pay off two verily new vehicles and in doing so reduced my monthly cash out-flow by $800. I’ve made plans to have my trading account refunded to previous levels within weeks and with the market in a confirmed correction maybe the timing is just right. In fact, I’d love it if the market proved my timing wrong. Either way, I've got no regrets. Sometimes, profits are for taking.