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That's rising markets and falling markets .....The former may indicate an overbought condition & a correction or bubble looming. The latter is problematic as you never know where the fall will stop. What I'd like to know is: Where were all these "geniuses" when the Dow was resting comfortably under 7,000 not so long ago?
I have some cash on the sideline, but am otherwise continuing to sit in what I consider to be longer-term themes (mobile, hard assets, EM, some healthcare, consumer staples and mobile payments/financial technology) and reinvesting the dividends (and a large portion of the portfolio is quite dividend-centric) when able.
Scott is tired of being nimble and quick - current positions (and adding a bit here-and-there if the opportunity arises) is likely where Scott will stick.
I agree with you on being nervous regarding a market that seems overbought and overly optimistic, but I continue to like what I believe are long-term themes and am just going to stick with them rather than try to time a market where fundamentals and logic are not always present.
Scott: I could not have said it better, although I might just add that "fundamentals" departed the picture YEARS ago, pre- 2008 Crash.
Your own words describe my own attitude and approach, too: "I agree with you on being nervous regarding a market that seems overbought and overly optimistic, but I continue to like what I believe are long-term themes and am just going to stick with them rather than try to time a market where fundamentals and logic are not always present."
@Hank, I personally would not go down too much lower in equity allocation at your age as you still need to plan for 20-30 years in retirement. If you have a very large nest egg perhaps you can do with much lower rates of return but otherwise, you will have to ignore short term volatility and have some risk exposure or you can short fall of your life expectancy even though you saved yourself from the discomfort of volatility.
As you noted in your post, uncertainty of what is next is causing a paralysis. Stick with balanced or allocation funds. They hide the individual asset class volatility in their mix and you will have better staying in the game and don't worry about being in and out decisions. Sometimes too much information (which most of it is actually noise) is not helpful for investing.
Reply to @MaxBialystock: "although I might just add that "fundamentals" departed the picture YEARS ago, pre- 2008 Crash."
Yeah and the increasingly short-term time horizons that people have aren't helping the markets, either.
Having some views on long-term themes (and, of course, what I view as long-term themes might be very different from someone else) that are broad or smaller in nature is helpful in terms of choosing comfortable longer-term investments.
Additionally, there's the Peter Lynch "Invest in what you know" option - investments in products that you see often (I own Reckitt Benckiser, and I could see their cold/flu products - such as Mucinex - in short supply when walking around some stores this Winter, for example, and Mucinex ain't cheap) is always another way to have a more comfortable long-term view.
As for fundamentals, if things turn sour, there's just going to be more money printed. Bad is good. Good is good, but not as good as bad because bad means more money printing.
Hank, not to be the Grim Reaper here, but you have 15.77 years left. Of course I know nothing about your health or genes so let's hope you are an outlier and live to be 100.
I am right behind you and will be 66 in April. Don't you ever wonder like I do when enough is enough and it's time to enjoy life to the fullest without always fretting over monetary allocations and the like? Worrying about money at our age can be detrimental to one's emotional and physical well being. At my age, any type of drawdown beyond 1.5% to 2% in my (very) hard earned nest egg is too much drawdown for my tastes.
Edit: By the way, my idea of living life to the fullest doesn't involve posting on investing or trading forums. So even though MFO is one of the few top notch forums around, I hope to drastically cut back my postings here sooner than later. Plus, hiking season is just around the corner.
Reply to @Hiyield007: (-: It's a great bunch here and my favorite site. The hardest part is I only buy one new fund about every 3 years on average - so have little to contribute. But, I enjoy the give & take here. Some of us enjoy "worry" - if you want to call it that. Part of our makeup I think. I'd also guess both of us could afford to ride-out that 15 or so life expectancy in cash - even at today's rates. But, what fun would that be?
Reply to @hank: >>> I'd also guess both of us could afford to ride our that 15 or so life expectancy in cash - even at today's rates. But, what fun would that be? <<<
Very true, plus I have the luxury (depending on one's perspective) of being single and living in one of the lowest cost areas of the country.
I am 65 and still working by choice as I enjoy my work, my golf, my fishing, my investing and most of all my family and life in general. I assure you investing allowed me to do and to enjoy things that I would not have otherwise been able to have enjoyed, including educating my son through grad school. Yep, the market provided the means.
Years ago, I use to bet the dogs for a little spiff and joy ... and, then came investing. In addition, I enjoyed the card game bridge and there I learned to play the hand that was dealt. Don’t gripe about it just make something out of it, much the same with investing. Now the dogs and bridge are gone for me ... but, I still enjoy investing and I have become more active in recent years with my allocation than I use to. This is because not long ago I could easily get four to five percent in a CD but not now. My cash allocation was/is much what it used to be about 15% to 20% cash consisting of 5% demand cash and 10% to 15% investment cash mostly in FDIC Insured CD’s. Now the CD ladder is no more and I have had to become active with the money that use to be invested in CD’s. Now, from time-to-time, I put some of it into play by investing in what I call special investment positions, aka equity ballast. If I could get four or five percent on my cash like I use to … I’d be more passive. But I can’t and I don’t know of any CD’s now paying that. Another thing that I have done is to expand the alternatives area of my portfolio with the reduction of assets from both the fixed and the equity areas by about five percent each.
In short words you might say investing has become a sport with me … and, so far I continue to bag my limit, so to speak, with some good old fashion strategies that my late father taught me. I have no problem currently selling into this equity run. Thus far the stuff I sold off has returned about five to six percent from 2013 alone plus what I made off of it in 2012 and prior years. And, most likely I’ll be putting some more cash ballast in play again when the market pulls back … and, I’ll make some more off of it when it rebounds. Hey right now the action is in equities … but, they will become overbought to the point where they will correct from some news driven event. They have in the past and they will do it again from my thoughts. And, I’ll be there to do a little buying when they have become oversold.
So, I am staying with my strategies and my thoughts are one should do what they feel most comfortable with. And, that includes sitting on the side line if that fits your fancy. However, I am putting money in play when I see opportunity and that includes those long term investment strategies … For you see, I have some of those too.
I wish all good investing … no matter your fashion of style of choice. One of the good things about investing is there is no one right way, or wrong way, when it comes to investing. I feel you will reap what you sow and to be able to reap you’ve got to sow and then harvest. I wish you, and all, the very best in whatever your investment avenue(s) of choice may be.
In addition, here is something that might give you a little energy ... It comes form way back and is by Clarence FROGMAN Henry and is titled ... "Ain't Got No Home." Enjoy.
Reply to @Skeeter: That's one cool video! ... Also, thanks for pointing out: The purpose of investing is to enhance our lives - not to replace them. Personally - enjoy cool cars, flights down to the Keys and time spent out on the water. Also - good beaches, good music and classic films. Others have from time to time commented on their interests and leisure activities. That said - I'll venture to guess that the vast majority here really do enjoy investing and learning and yacking about it.
fyi -- I pulled some back today on the thought that a correction is overdue, we'll see how that holds up but considering S&P 1500+, that's a pretty nice point to sell at, esp when a lot was purchased at S&P 750s.
Comments
Scott is tired of being nimble and quick - current positions (and adding a bit here-and-there if the opportunity arises) is likely where Scott will stick.
Scott also remains concerned about inflation: "The 24-commodity heavy S&P GSCI index (widely recognized as a leading measure of general price movements and inflation in the world economy) has never been as high in early February as it is currently - ever." (http://www.zerohedge.com/news/2013-02-05/no-inflation-commodities-highest-ever-time-year)
I agree with you on being nervous regarding a market that seems overbought and overly optimistic, but I continue to like what I believe are long-term themes and am just going to stick with them rather than try to time a market where fundamentals and logic are not always present.
Your own words describe my own attitude and approach, too: "I agree with you on being nervous regarding a market that seems overbought and overly optimistic, but I continue to like what I believe are long-term themes and am just going to stick with them rather than try to time a market where fundamentals and logic are not always present."
As you noted in your post, uncertainty of what is next is causing a paralysis. Stick with balanced or allocation funds. They hide the individual asset class volatility in their mix and you will have better staying in the game and don't worry about being in and out decisions. Sometimes too much information (which most of it is actually noise) is not helpful for investing.
Yeah and the increasingly short-term time horizons that people have aren't helping the markets, either.
Having some views on long-term themes (and, of course, what I view as long-term themes might be very different from someone else) that are broad or smaller in nature is helpful in terms of choosing comfortable longer-term investments.
Additionally, there's the Peter Lynch "Invest in what you know" option - investments in products that you see often (I own Reckitt Benckiser, and I could see their cold/flu products - such as Mucinex - in short supply when walking around some stores this Winter, for example, and Mucinex ain't cheap) is always another way to have a more comfortable long-term view.
As for fundamentals, if things turn sour, there's just going to be more money printed. Bad is good. Good is good, but not as good as bad because bad means more money printing.
http://life-span.findthedata.org/d/d/67
I am right behind you and will be 66 in April. Don't you ever wonder like I do when enough is enough and it's time to enjoy life to the fullest without always fretting over monetary allocations and the like? Worrying about money at our age can be detrimental to one's emotional and physical well being. At my age, any type of drawdown beyond 1.5% to 2% in my (very) hard earned nest egg is too much drawdown for my tastes.
Edit: By the way, my idea of living life to the fullest doesn't involve posting on investing or trading forums. So even though MFO is one of the few top notch forums around, I hope to drastically cut back my postings here sooner than later. Plus, hiking season is just around the corner.
Very true, plus I have the luxury (depending on one's perspective) of being single and living in one of the lowest cost areas of the country.
I am 65 and still working by choice as I enjoy my work, my golf, my fishing, my investing and most of all my family and life in general. I assure you investing allowed me to do and to enjoy things that I would not have otherwise been able to have enjoyed, including educating my son through grad school. Yep, the market provided the means.
Years ago, I use to bet the dogs for a little spiff and joy ... and, then came investing. In addition, I enjoyed the card game bridge and there I learned to play the hand that was dealt. Don’t gripe about it just make something out of it, much the same with investing. Now the dogs and bridge are gone for me ... but, I still enjoy investing and I have become more active in recent years with my allocation than I use to. This is because not long ago I could easily get four to five percent in a CD but not now. My cash allocation was/is much what it used to be about 15% to 20% cash consisting of 5% demand cash and 10% to 15% investment cash mostly in FDIC Insured CD’s. Now the CD ladder is no more and I have had to become active with the money that use to be invested in CD’s. Now, from time-to-time, I put some of it into play by investing in what I call special investment positions, aka equity ballast. If I could get four or five percent on my cash like I use to … I’d be more passive. But I can’t and I don’t know of any CD’s now paying that. Another thing that I have done is to expand the alternatives area of my portfolio with the reduction of assets from both the fixed and the equity areas by about five percent each.
In short words you might say investing has become a sport with me … and, so far I continue to bag my limit, so to speak, with some good old fashion strategies that my late father taught me. I have no problem currently selling into this equity run. Thus far the stuff I sold off has returned about five to six percent from 2013 alone plus what I made off of it in 2012 and prior years. And, most likely I’ll be putting some more cash ballast in play again when the market pulls back … and, I’ll make some more off of it when it rebounds. Hey right now the action is in equities … but, they will become overbought to the point where they will correct from some news driven event. They have in the past and they will do it again from my thoughts. And, I’ll be there to do a little buying when they have become oversold.
So, I am staying with my strategies and my thoughts are one should do what they feel most comfortable with. And, that includes sitting on the side line if that fits your fancy. However, I am putting money in play when I see opportunity and that includes those long term investment strategies … For you see, I have some of those too.
I wish all good investing … no matter your fashion of style of choice. One of the good things about investing is there is no one right way, or wrong way, when it comes to investing. I feel you will reap what you sow and to be able to reap you’ve got to sow and then harvest. I wish you, and all, the very best in whatever your investment avenue(s) of choice may be.
In addition, here is something that might give you a little energy ... It comes form way back and is by Clarence FROGMAN Henry and is titled ... "Ain't Got No Home." Enjoy.
Skeeter
Since you like cars … I guess that includes fast cars?
Here is a chase scene featuring two of the most famous mussel cars of all times …
The General Lee vs. The Bandit Trams Am …
Enjoy.
Skeeter
Looks pretty similar to Hank's actually.
Attendant risk allocation: 9.7% STDEV, 5.8% DSDEV, and 3.5% Ulcer Index.
http://oldprof.typepad.com/a_dash_of_insight/2013/02/dumb-money.html