Control Your Greed, Aging Grasshopper

The stock market's fundamental gauges have been flashing yellow since the beginning of the year, and many market watchers have been urging investors to reduce their stock holdings. One bearish observer is Nobel Economics prizewinner Robert Shiller, whose "Shiller ratio" (roughly, the S&P 500's price-earnings ratio) is at "25, or 49% above its historical average."

The Shiller ratio is below its all-time high of 2000 but is above previous times the market turned down.

Your humble punter rarely sells stock winners because a) he is incurably optimistic, and b) he hates to pay taxes on capital gains. As full retirement approaches, however, he must face the fact that the limited remaining time allows fewer opportunities to recover from bear markets.

We will dispose of significant amounts of stock held in tax-deferred accounts (IRAs, 401(K)s). The gains will be preserved, but they won't be taxable until withdrawal. Greed is good, but from sad experience, too much greed can be one's downfall.

Bulls make money, bears make money, pigs get slaughtered.

One of the funds in the 401(K) has done very well and now will be sold.