With Europe in trouble and China’s rate of growth slowing, the United States may eventually be the fortress of the world’s economy. That is why long term I’m bullish, but shorter term the market is telling us that the trend is down and that defensive measures should be taken.
Some hope for the bulls was provided by a statement from Fed Chairman Ben Bernanke that “there is room for more action on the part of the Fed to shore up growth.” But the long-awaited Jackson Hole meeting in late August produced only promises that the Fed could provide help if needed. Meanwhile, the European Economic Community (EEC) is on the brink of fracture as the squabble continues among the higher-producing countries in the north and the more leisurely producers of the south. The European Central Bank (ECB) appears incapable of solving the problem.
In such an uncertain environment, it is best to stick with high-quality stocks with proven performance and high dividend yields and sell underperformers. High-tech non-performers could be subject to a significant decline, and so this month I have focused on several that appear to qualify as dangerously overpriced. Here is our list of stocks to sell in September: