Warren Buffett is selling stocks. Should you?

It's no secret that stocks have done pretty well this year. It's been a bull market overall, no question. But a good question to consider is "Why?" and at what point do things begin to shift? Can you afford to take a huge hit to your portfolio this close to retirement if we are facing another 2008 type drop? Do you have the time to recover?

People watch the movements of the "Oracle of Omaha" like a hawk. Warren Buffett clearly knows what he's doing and he knows how to spot trends and prepare his positions strategically. And he has sold a staggering $28 billion worth of stock this year.

Everyone knows the idea is to buy low - sell high. And if everyone had a crystal ball, they could easily do just that. The trick is knowing when things are undervalued or overvalued. Buy when they are undervalued. Sell when the prices are inflated. Obviously. But how do you know?

This brings us back to the question of: WHY has the stock market gone gangbusters this year? One reason might be all of the money printing that happened during the pandemic. That money had to go somewhere, and a lot of it went to stocks, pushing prices sky high, vs the value and fundamentals. Now that the pandemic is in the rear view mirror, there is a pull back, interest rates are higher and even M2 - the money supply - is shrinking, the tide is potentially receding from stocks and we could be about to see a pretty big crash.

Maybe that is what Warren Buffett suspects... And he's betting $28 billion he's right.

Maybe Warren Buffett is selling high.

Meanwhile, there are lots of reasons to believe there is fundamental value in precious metals right now. Bank of America and many other financial analysts are bullish on gold. Central bank demand is at a record high, which is a big driver for gold prices as central banks soak up supply for long periods of time. Silver especially could be considered undervalued relative to gold if you look at the gold/silver ratio. How much do you need to retire? How close are you to getting there? As you make your financial plans for next year, consider adding gold and silver to your portfolio. Precious metals could be an important part of buying low and selling high in 2024.