While the equity markets are edging closer to reaching a new record of 30,000 on the DOW, I believe now would be a good time to discuss something rarely talked about: the discipline of taking profits. Investors may want to consider trimming positions where significant gains have been achieved and look to reallocate these gains to more conservative investments such as fixed income securities and/or other out of favor equity sectors like energy and financials.

Over the last seven years, the energy sector has significantly underperformed the broader market as measured by the S&P 500 Index. Many of these companies have attractive dividend yields ranging between 4 to 7%; however, one needs to be very careful not to reach for a high dividend yield of a company whose growth rate and earnings are slowing.

Sticking with large well-established companies who have remained profitable throughout this energy slump would be prudent. These companies are broadly integrated and deeply entrenched within this industry and have a long history of paying dividends. Remember, past performance is no guarantee of future results. Proper diversification and asset allocation are a must.

Any opinions are those of J. Greg Garner and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Asset allocation and diversification do not guarantee a profit nor protect against a loss.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal.

Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance.