Some on Wall Street are calling it the 'Santa Rally', as the Dow Jones Industrial Average flirts with an all-time high of 20,000 points just before the stock market closes for the Christmas holiday.
The Dow closed at 19,942 points on Wednesday. There are many reasons for the six-week rally, but Brent Hoskins with American Century Investments credits a new presidency, new legislation, potential deregulation and the possibility of jobs returning to the U.S. with the rally.
Still he advises that investors proceed with caution.
"The natural tendency is to chase that and to buy into that rally, but the reality is that not everyone should buy into that rally," he said. "You tend to go with the herd, and you tend to follow your emotions and with investing that can lead to poor outcomes."
Instead of trying to get rich quick by throwing all your money into the stock market right now, Hoskins recommends that investors come up with a strategic plan for investing.
"End of year is just a great time to review your overall situation," said Hoskins. "As we head into a new year, you can see what is the appropriate level of stock and bonds to have. There might be some changes you need to make there. It's key to position yourself well going into a new year."
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