Reply to @Maurice: HSAs survive. HDHPs are more questionable - I've seen the issue raised but no clear answers yet. (The problem IMHO is the min level of coverage required of all health plans, though current HDHPs already provide for preventive care w/o deductibles.)
Worst case - you can continue using (spending from) your HSA.

Reply to @Gary:
Hi Gary,
What you're describing sounds like a Flexible Saving Account, not an HSA. Unused contributions to an HSA can be carried over from year to year.

#4 looks like a good plan, with a lot of fees though. If I read this right basic cost is in excess of $ 79.00 per year. Is your unused remainder carried over?
My only option is a payroll deduction as signed up for at enrollment. My HSA account does not have any such options where I am employed. In fact if it is not used up in the plan year - that unused remainder is forfeited. If I left the job for other employment and had more funds in the HSA then medical bills they would also be forfeited. I try to figure savings close to actual needs.
Gary

I was researching this option and come across a number of ways to invest HSA contributions into mutual funds.
Mutual funds which will act as HSA custodians for direct investors:
Geier Funds
Toreador Funds
Huntington Funds
Mirzam Funds
IMS Capital
Appleseed Fund
The Bruce Fund
Sparrow Capital
Roosevelt Multi-Cap Fund
Other HSA Mutual Fund options:
1.TD Ameritrade Brokerage Through hsabank.com/HSABank/Accountholders.aspx HSA Bank
-you can link an hsabank account to a TD Ameritrade brokerage, allowing for fee-free ETF trading.
2.Saturna Capitalsaturna.com/
-Brokerage based, no monthly or annual fee
-No fees if you invest in their mutual funds (AMANX, AMAGX, AMDWX, SSGFX, SSIFX, SCORX, SGHIX, STBFX, SBIFX)
-Commissions for self-directed trading ~ $14.95 per trade
-Inactive fee after 1 year ($12.50 or $25 for mutual fund/brokerage account)
3.alliantcreditunion.org/depositsinvestments/healthsavings/ Alliant Credit Union
-Pays 0.7% APY (updated 6/17/13) on balances above $100,
25 free checks, debit card, no fees. Join the PTA (local or national) to qualify for membership.
$5.95/month to invest anything over $1000 into Mutual Funds
4.healthsavingsaccount-hsa.com/hsadministratorsfundslist.htm Health Savings Administrators, are 15 Vanguard® Funds
-Debit Card alternative - not connected with mutual fund account
-Available through Resource Bank-There are no deposit fees, no per check fees and no fee to close the account.
-Pays 1% APR if monthly balance is above $1000
-FDIC insured
-Monthly maintenance fee - $2
-Account setup fee $ 20.00
-Annual administrative fee-single account $ 35.00
-Annual administrative fee-family account $ 60.00
-Administrative fees are payable direct in advance.
-Mutial Fund customers (no debit card)
- Custodial fee .00125 per quarter, deducted from account balance

Reply to @msf: Thanks, msf, for the info.
I'm not eligible to open an HSA. One of the main requirements for HSA is to have a high-deductible health plan (HDHP) which I don't have. So I'm still looking for options to buy FDSAX without the load.

AMatMFO, meet detrick. Detrick, meet AMatMFO.
Detrick started a thread where he asked how to select among fund options he has in his HealthEquity HSA. One of those options is FDSAX (SunAmerica Focused Div Strategy). So that could give you a way to get FDSAX without a front end load (assuming this HSA waives the load, and assuming you have an HSA you could transfer there).

Detrick, meet AMatMFO. AMatMFO, meet detrick.
AMatMFO recently started a thread on a particular fund in your set of offerings - SunAmerica Focused Div Strategy (FDSAX). In this thread you'll find some positive comments about the fund that go beyond counting stars. So you might find that thread useful.
Conversely, the question there is how to purchase the fund without paying the front end load. Using an HSA account like this one (assuming the investor has an HSA account that could be transferred) might be an answer to the question.
One qualification - I can't tell for sure whether HealthEquity waives front end loads. What I can tell from looking at its fund list, is that not all loads are waived. Funds are often sold in multiple share classes, and if the share class you're looking at charges too much (technically, a 12b-1 fee in excess of 0.25%/year), it is considered a load fund. That extra charge can be used to pay the broker (or HealthEquity).
One of the funds sold in this HSA, PIMCO Real Return R (PRRRX), fits that description. So you need to look out for not only which funds you want, but whether you'd be paying too much for them by buying them here. (The PIMCO fund is available from pretty much any broker in a "D class" that charges 1/4% less - PRRDX.)

Thank you all for your feedback - its appreciated. I wasn't entirely wanting to discuss asset allocation or the ins-and-outs of HSAs in detail. Rather, I wanted to better understand how I could go about selecting a particular fund in a given asset class. Are there other threads that already cover this? If so - please point me to them! :) Are there some philosophies that folks here ascribe to?
For example, all 4 diversified emerging markets funds (RNWEX, DREGX, ODVNX, HEMZX) are Morningstar 5 star funds, but have different expense ratios, performance history, and net assets. And probably a lot of other things!
Are there some good methods to assess mutual funds that I could work with? Right now I feel like I am close to just picking something in the dark. As an example andrei mentions that ARTKX is one of the "best" international value funds. That's great! But why?
Thanks!

Since you are responsible for certain health cost I woud determine what that amount would be in a 1-3 year timeframe and allocate those dollars to conservative investments. As you spend down these health savings remember to reallocate so you always have a 1-3 year conservative allocation to access. If your HSA accumulates beyond these 1-3 year health needs than create a diversified portfolio with 1/2 US and 1/2 Foriegn.
Choices for 1-3 year (safe) money:
Cash = 20% at all times to meet deductibles and maintenance expenses.
MWTRX - 1st choice...excellent long term safe money position (70% of safe money)
CHTBX - 2nd
PFODX - 3rd
PRRRX - 4th, May help protect your safe money when rates (inflation) returns (10% of safe money)

Hi,
I have an HSA with HealthEquity and would appreciate any input/advice on the available funds they have. It seems that in many cases there are multiple mutual funds in a single asset class and I am trying to better understand how to compare and select one.

Category Symbol	Fund	Name
COMMODITIES BROAD BASKET	PCRDX	PIMCO COMMODITY REAL RET STRAT D
DIVERSIFIED EMERGING MKTS	RNWEX	AMERICAN FUNDS NEW WORLD R4
DIVERSIFIED EMERGING MKTS	DREGX	DRIEHAUS EMERGING MARKETS GROWTH
DIVERSIFIED EMERGING MKTS	ODVNX	OPPENHEIMER DEVELOPING MARKETS N
DIVERSIFIED EMERGING MKTS	HEMZX	VIRTUS EMRG MKTS OPPTY FD CL A
FOREIGN LARGE BLEND	ARTKX	ARTISAN INTERNATIONAL VALUE INVESTOR
FOREIGN LARGE BLEND	LISOX	LAZARD INTL STRATEGIC EQUITY OPEN
FOREIGN LARGE BLEND	OIDNX	OPPENHEIMER INTERNATIONAL DIVERSIFIED N
FOREIGN LARGE GROWTH	OIGAX	OPPENHEIMER INTERNATIONAL GROWTH A
FOREIGN LARGE VALUE	MINGX	MFS INTERNATIONAL VALUE R3
INFLATION-PROTECTED BOND	PRRRX	PIMCO REAL RETURN R
INTERMEDIATE-TERM BOND	CHTBX	ASTON/TCH FIXED INCOME N
INTERMEDIATE-TERM BOND	MWTRX	METROPOLITAN WEST TOTAL RETURN BOND M
INTERMEDIATE-TERM BOND	PIOBX	PIONEER BOND FUND CL A
INTERMEDIATE-TERM BOND	CMPIX	PRINCIPAL INCOME A
INTERMEDIATE-TERM BOND	PDBAX	PRUDENTIAL TOTAL RETURN BOND A
LARGE BLEND	SMGIX	COLUMBIA CONTRARIAN CORE Z
LARGE GROWTH	WCEYX	IVY CORE EQUITY Y
LARGE VALUE	IEDAX	ING LARGE CAP VALUE A
LARGE VALUE	LCEIX	INVESCO DIVERSIFIED DIVIDEND INVESTOR
LARGE VALUE	FDSAX	SUNAMERICA FOCUSED DIVIDEND STRATEGY A
MID-CAP BLEND	FEFAX	FIRST EAGLE FUND OF AMERICA CL A
MID-CAP GROWTH	NICSX	NICHOLAS
MID-CAP GROWTH	PEMGX	PRINCIPAL MIDCAP A
MID-CAP GROWTH	RYBHX	RYDEX S&P MIDCAP 400 PURE GROWTH H
MODERATE ALLOCATION	BALFX	AMERICAN FUNDS AMERICAN BALANCED F-1
NATURAL RESOURCES	FMFTX	FIDELITY ADVISOR MATERIALS T
NATURAL RESOURCES	ICBMX	ICON MATERIALS S
NATURAL RESOURCES	RYBAX	RYDEX BASIC MATERIALS ADV
REAL ESTATE	RRREX	DWS RREEF REAL ESTATE SECURITIES S
REAL ESTATE	FHETX	FIDELITY ADVISOR REAL ESTATE T
REAL ESTATE	PETDX	PIMCO REAL ESTATE REAL RETURN STRATEGY D
REAL ESTATE	HLPPX	REMS REAL ESTATE VALUE OPPORTUNITY P
SMALL GROWTH	SASMX	CLEARBRIDGE SMALL CAP GROWTH A
SMALL GROWTH	JGMRX	JANUS TRITON R
WORLD BOND	GOBAX	LEGG MASON BW GLOBAL OPPORTUNITIES BD A
WORLD BOND	MGGBX	MANAGERS GLOBAL INCOME OPPORTUNITY
WORLD BOND	PFODX	PIMCO FOREIGN BOND (USD-HEDGED) D
WORLD BOND	GTRAX	PRUDENTIAL GLOBAL TOTAL RETURN A

Also, are there any thoughts on COLUMBIA CONTRARIAN CORE Z (SMGIX)? I had been using a Vanguard Fund, but it is being replaced with this.
Thanks!

Reply to @Charles:
Hi Charles,
Many thanks for reading both parts of my overly long submittal. I appreciate your patience, your kind words, and your question.
I am a much more committed buy-and-hold investor now than I was when I purchased my first stock position in the mid-1950s. I was never a rapid fire trader, but I definitely was more active in the past than I currently am. Mine has been an emerging investment philosophy, guided both by practical experience and extensive book readings. I even took a few formal courses.
I have tried both technical and fundamental techniques, have abandoned many of them, and have loosely and selectively adopted a few elements from both disciplines. So my approach is a mixed bag given the uncertain persistency of any of these market tools.
Probably the most significant lesson that I extracted from this long, and sometimes sorrowful , investment history is the wisdom that markets are mean reverting. The marketplace has a strong, compelling pull towards a regression-to-the-mean. All good things end abruptly, so constant vigilance and adaptability are cornerstones for investment survival. But too much activity also hurts performance, so a balance, that is likely different for each market participant, must be identified.
Predating the Peter Lynch method of choosing a stock by personally testing its acceptance and its products, my first stock encounter was Chock Full o’Nuts company after I observed its hugely successful outlets in New York city.
Initially I traded using the Magee and Edwards tome “Technical Analysis of Stock Trades” as a guiding template. Later, I discovered Benjamin Graham’s “Intelligent Investor” book and mutated into a fundamentals-based investor. I discarded many of the principles advocated by both texts, but did retain those that fit my own investment style. At this moment, I invest using a loose and limited mix from both these tool kits
For example, from a technical perspective, several times each month, I still examine the 200-day Indices moving averages to gauge market momentum. Things evolve. In the past, I used the charts constructed from daily price changes; today, I use charts made from monthly reporting frequency. There is statistically a discernable difference. The daily formulation gave far too many false signals.
For example, from a fundamental perspective, I examine Price-to-Earnings ratios to gauge overpriced or underpriced scenarios. I review market-wide profit projections.
From a macroeconomic perspective, I review absolute GDP levels and their growth rates. Demographic shifts, inflation forecasts, and interest rates also influence market returns. I examine the AAII Investor Sentiment Survey to assess the individual investor’s overall emotional feelings from a contrarian’s viewpoint.
I only explore these numbers several times per month. Excessive trading is hazardous to our wealth; excessive market examination is hazardous to our wealth and health.
I do not evaluate these data in any formulaic manner. I suspect that my approach is much fuzzier and less disciplined than many who contribute to the MFO Board. Precise quantification of financial terms can be very misleading and give a false sense of security if the inputs are not accurate, if the data changes in unpredictable whip-like fashion, or if the models are incomplete or entirely wrong-headed. Investment data and analyses suffer from all these deficiencies.
I did not venture into the mutual fund mire until the mid-1980s. My bible for that entry decision was Burton Malkiel’s classic “A Random Walk Down Wall Street”. Until that fateful tipping point my smallish portfolio was 100 % in stock holdings. That book dramatically altered my investment perceptions and style.
Since my Malkiel enlightenment, I have more or less consistently shifted my portfolio away from individual stocks and into mutual funds and ETFs. I sold my last stock position about 5 years ago.
Today, I would classify my investment philosophy as buy-and-hold, but not forever. I typically trade only once or twice a year with a goal to incrementally improve my portfolio by pruning some unwise earlier investments.
I never have personally participated in the sector rotation tactic; I allow my active mutual fund managers to perform that delicate task. I’m simply not well informed enough to play that sensitive game. Again and again those annual Periodic Tables of sector returns demonstrate the volatility and the unpredictability of sector rewards. I am surely not a qualified soothsayer in that arena; I’m not sure anyone else is either.
I do have a few long term market preferences, and my portfolio reflects those biases. I do practice broad portfolio holdings diversification, but I have also overweighed my positions in the health care and the real estate sectors. That’s just me and my special brand of prejudices; I do not necessarily recommend those extra positions for someone else’s portfolio with its specific time horizon, risk aversion, target allocations, and special set of preferences.
In summary, I deploy my small array of market signals to incrementally adjust my top-tier asset allocation mix of equity and fixed income holdings. I do not use these indicators to modify my next level of allocation classes. My modest list of indicators is not sufficiently precise enough to perform that more subtle, sorting task.
I hope this clarifies, but I’m somewhat dubious given the rather disorganized manner by which I make and enforce my investment decisions. In every military battle, plans are modified after the first shot is fired.
Best Wishes.

Since gold's high in August 2011 the price has declined in the vicinity of 30%. Silver has declined some 54% since its April 2011 high. Listening to all the sages today on CNBC and elsewhere I hear a lot about don't worry, be happy because prices will go back up to the highs. I was hearing the same rhetoric in mid-2000 after the NASDAQ had declined over 30% and we saw how that eventually ended. True, precious metals aren't stocks but the previous bear market in gold lasted 20 years and the last bear market in silver about as long. Respect price action and don't be clouded by your biases, be that gold, stocks, or any investing/trading vehicle.
Edit: Lumpy died today. We oldtimers fondly remember that TV character from Leave It To Beaver.
Edit: And yes I know, the NASDAQ was more of a bubble than maybe gold and silver at their highs but the point is, bear markets can last a lot longer than the soothsayers would lead you to believe.

I tend to take a conservative view of cash. Not trying to make money on it, just trying to lose a little less. Some ideas (very little in the way of funds, though):
- Series I savings bonds ("I Bonds") - fully liquid after 1 year (3 months interest lost until you own them for five); guaranteed not to lose money. And interest is tax-deferred, state-tax-exempt.
- "Higher" interest savings accounts/money market bank accounts - these tend to pay around 1% these days. Not much, but safe and about 1% higher than MMFs. One may be able to do slightly better (at higher risk) with corporate "savings accounts", like GE Interest Plus
- Muni short/intermediate bond funds, e.g. Vanguard Ltd-Term (VMLUX), US Global Near Term (NEARX) - SEC yields under 1%, but after tax may still beat the bank/credit union accounts, depending on your bracket.
The latter is about as far out as I'd push "cash" (enhanced or otherwise). After that, it's not part of my cash allocation.
A variant of the savings account is the HSA account. These tend to pay slightly higher interest, so instead of paying off medical bills from the HSA account, one can pay them out of pocket, and keep whatever cash is in the HSA earning slightly higher interest, tax free. Always liquid so long as you can show that you had medical expenses (after the HSA was opened) that you could have applied the HSA money toward.
In retirement accounts, you may have access to a stable value (or traditional annuity) account, e.g. TIAA-CREF Group Retirement (403(b)) traditional annuity (3%).

I have SHSAX (load waived) in my 401k and it has done very well long term vs. PRHSX, although in the last 3-5 years it has lagged.

As a partial counter to what Joe is apparently hearing from the hair-on-fire soothsayers of cable "bid'ness" networks, etc., here via a Barron's blog is a more measured piece from Fidelity:
http://blogs.barrons.com/incomeinvesting/2012/12/20/fidelity-dont-count-on-bond-bubble-or-a-bursting/

Hi Guys,
Well here we go again as we expose ourselves to the market forecasts for 2013. Good luck if you think these market gurus are especially prescient and gifted soothsayers. They are not.
I do not waste precious time seeking or listening to their forecasts. I suggest you do likewise. Your time should be a highly valued commodity that deserves better exploitation.
William Bernstein beautifully captured the essence of investment forecasting for the individual investor. I’ll crudely paraphrase his insightful summary as follows: “There are three types of investors: (1) those who know they can’t know the future, (2) those who don’t know that they don’t know, and (3) those who know they don’t know, but claim that they do have this ability.”
I suspect most MFO members fall into the first grouping. Likely, many neophyte investors and hyperactive traders populate the second grouping. I propose that a majority of professional investment advisors and gurus collect in the third cohort.
Some in that third category actually believe that they have a special forecasting talent. They are unwittingly wrong. These folks are like Astrology advocates pretending to be scientists. The investment forecasting skill set does not exist in any precise format. Uncertainty rules.
But a significant faction of that third cohort is peopled by folks who deal in financial pornography. These guys know better, but are fueled by financial incentives. They are typically grossly overpaid for their often wealth destroying bad forecasts. They are shameless shills, shysters, and charlatans. Don’t trust their expertise, don’t trust their opinions, and don’t trust them. They will surely erode your wealth if you follow their often self-serving guesstimates that masquerade as scientific projections. What a sad way to make a living.
I have not read the referenced article; I do not intend to do so. Therefore I make no specific judgments about the investment professionals interviewed for that report, or the quality of their estimates. I sincerely hope that they do not fall into the last grouping that I discussed. For all I know they may be disillusioned true believers in their forecasting acumen.
But I propose that it doesn’t matter whatsoever. These market wizards have no more forecasting expertise then any MFO participant. Considering the uncertainties confronting us in 2013, their predictions have about the same merit as our own estimates.
Unfortunately, all of these guesstimates are unreliable. Therefore, one reasonable strategy might be to practice flexible thinking, to keep some reserves, to maintain a long term time horizon if possible, to make minor adjustments only as required, to stay focused, and to stay the course. All of that is within our capabilities given a committed portfolio plan. Trust your own instincts.
As renown economist Paul Samuelson noted: “ It is not easy to get rich in Las Vegas, at Churchill Downs, or at the local Merrill Lynch office.” For most of us, the best portfolio advisor is ourselves.
If you visit enough of these expert forecasts, and plot the assembled predictions, you will generate a completely darkened scatter map that provides no reliable actionable exegesis powers. So don’t waste your own energy on this useless task.
Ted, I agree that Sam Eisenstadt might be a rare exception. I too cut my investing teeth on his Value Line research. But that work mostly concentrated on individual company assessments. His excellent original evaluation techniques did require a rework after many years of success that were followed by some hard failures. I suppose nothing remains constant in the investment universe.
Merry Christmas.

Reply to @catch22: I totally agree. Corporations should get out of the business of picking funds and the 401k, 403 type of account should be liberated.
I am actually pissed of various different type of account for different purposes. We do have IRA, Roth IRA, 401k, 529 Collage Savings Account, HSA accounts. There should be one type of tax advantaged account that cater for multiple purposes. The money is fragmented unnecessarily and also you cannot always determine in advance (actually usually) what amount you would need for what purpose (Retirement, College, Health Savings)

Reply to @Flack:
Hi Flack,
Thank you so much for reading and responding to my posting.
Somehow I sense that you and I do not share a common ground on the merits and shortcomings of investment Technical Analysis (TA).
There’s absolutely nothing shocking or unusual about a divergence in opinion, especially over investment matters. The marketplace only functions effectively when there is a near equality in sell/buy decisions. I certainly respect your decision to embrace some form of TA; I anticipate that you respect my decision to mostly reject that approach.
Note that I qualify my rejection with the adverb “mostly”. Although I do not deploy any TA techniques when making specific investment decisions, I do use Index-like Moving Average methods to confirm or reinforce my top-tier, global asset allocation decision.
I am a little perplexed that my use of the word “challenge” rubbed a sore spot. It was not introduced in any aggressive manner; I was simply attempting to construct a more colorful, entertaining submittal. Perhaps I should have “invited” a reply rather than laying down the gauntlet challenge. Confronting and overcoming challenges are a ubiquitous and necessary part of life. I am somewhat stunned by your sensitivities. Without challenges, life would be moribund.
If the choice of a single word represents the sum total of your objections to my piece, then I accomplished my goal. Look, if you subscribe to TA methodology and mythology that is your business and your business alone. Given that you are a seasoned and scarred investor, it would be imprudent of me to try to convince you otherwise. My posting was directed at neophyte investors who might benefit from my experiences, many of them involving fruitless TA adventures.
I have been investing and studying investing for over 55 years, the first decade almost exclusively dedicated to understanding and applying TA approaches. For the most part, those approaches failed to deliver index-like rewards. I am flexible enough to recognize that the failures could be attributed to either the methods themselves or to the defective way I implemented them, or perhaps even to the investment period itself.
You labored over the fact that I have formed biases and preferences. If an investor has not done so, he is truly lost at sea. Choices are the end game event in the decision making process. I further propose that the highest value product in decision making is the process itself, and not the actual final decision. Within the investment universe, the decision is really never final since it can be easily reversed whereas a corrupted decision process can do continuing damage to both wealth accumulation and preservation.
Investing is all about alternatives, options, biases, preferences, and choices. Luckily, they are all temporal and reversible, albeit usually with some financial penalties. At this moment, and at the highest level of investment decision making, I favor diversification over concentration, mutual funds over individual securities, active over passive fund management, long-term investing over short-term speculation, fundamental analyses over technical analyses, and home grown products over foreign entities.
These current favorites are not absolute nor are they forever permanent. Since the future is unknown and unforeseeable, I subscribe to a mixed portfolio asset allocation philosophy. To illustrate, my present portfolio contains two highly focused mutual funds, but is dominated by funds that have largely diversified holdings.
Let’s agree to lighten the tension just a little bit. Your reply reminded me of a famous World War II pilot’s saying. It goes something like this: If you don’t take any Flack, then you are off-target. Since you provided the solicited commentary, I presume I was on-target. I apologize for the WW II reference; it is just my poor attempt to inject some humor into this exchange. This is not a serious matter that warrants misbehavior. We merely disagree on an investment approach. Among the investment cohort, what’s new about that? Nothing.
I’m puzzled and pleased by your interest in my annual market return forecast. I am surprised and flattered that you saved it. I do not. On a yearly schedule, I complete a rather superficial analysis to either affirm my present asset allocations or to inform of the need for an incremental adjustment to it. In performing the calculation, I employ a generic formulation recommended by John Bogle in his commonsense book.
My modified version of the Bogle method includes a fundamental component that incorporates factors like equity dividend yields, population and productivity growth estimates, corporate profit projections, and a correlation between corporate profits and GDP growth rate. A second element in the calculation involves a speculative component that is evaluated using P/E ratio change guesstimates and sentiment signal forecasts. It is fun to assess likely market returns, but it is definitely not a precision tool. The procedure is unsophisticated from an economist’s perspective and demands only about one hour of attention.
The procedure almost always yields a positive market prediction so it is directionally biased and consequently is historically correct only about 70 % of the time. I fully recognize the deficiencies of the overall method, and I documented it accordingly. I freely admit that the forecast has a lot of guesswork embedded in it. Perhaps I did not emphasize the shortcomings of the forecast clear enough when I posted it. Sorry about that. I do not claim soothsayer capabilities.
If I felt the need to update my overall market forecast today, as you requested, I would likely lower my equity market projection somewhat. The various government efforts to revitalize the economy have disappointed. I fear full economic recovery is still a ways off. The Federal Reserve continuously addresses this dire situation. The current issue of the Business Outlook Survey by the Philadelphia Fed supports my assertion.
Here is the Link to that referenced study:
http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2011/bos0811.pdf
Best wishes for your continuing investment success.

I completely disagree - these are no longer markets, but theater to some degree, with indirect (and I'll debate that there is a PPT) intervention from TPTB, who view market rises as adding to a "wealth effect" (which is rendered ineffective to some degree by the fact that the purchasing power of the currency continues to be eroded.) Given all manner of recent operations (POMO, etc) acting as if the government is not actively trying to intervene in markets both indirectly (and I'll say directly) is something I'll completely disagree with. There are some people who continue to believe, it seems, that this is the same market as a couple of decades ago - whatever allows one to sleep at night.
"Buy and Hold" investing is really - in my opinion - only for someone truly comfortable with holding something for 5-10 years - literally putting something away that you believe has that strong of a fundamental case (and this is primarily for specific stocks). Otherwise, how anyone can discuss buy and hold in a market where 70% of the market is computer-generated trading that takes place over a time-frame that is frequently less than a minute, I don't know.
I'm not selling at the moment because I do continue to believe that we face the possibility of significant inflation over the next decade and am in names that I believe could do well in that environment. However,we have serious problems and I'll be the one to say that we might not fix them or we might not fix them for years. I'll also note that we're at the point where I think any more significant policy errors could cause massive, large-scale problems.
Any which way, we've spent trillions in various stimulus programs and we're where? What did we get for that money - and now we're talking QE3? I'm baffled by any discussion about how we can recover smartly when we just had a remarkably embarrassing couple of weeks where it became quite apparent that we have a government who can't begin to work together until the 11th hour and even then we got an agreement that no one was happy with (but we're going to go further into debt.) I think to some degree the selloff this week is due to a market that is starting to wake up to the fact that the current government is incapable of handling the problems that we face and really even working together in any positive fashion.
This sort of soothsaying and excuses that we'll get out of this because we always do lets those who have to guide and provide leadership for this economy completely off the hook. We don't have to get out of this, and all of this "Europe is worse than we are" is more BS that directs attention away from our own shortcomings - but whatever makes us feel better over the short-term, right? Spending smartly would have been spending a fortune to upgrade this country's crumbling infrastructure (maybe PPP's, like they have overseas? - Public/Private Partnerships) rather than dumping into banks that should have gone under (and do not appear in great shape today even after all the money that has been thrown at the problem.)
"Failing infrastructure will cost the United States billions of dollars in lost productivity, income and trade in coming decades, according to a civil engineering report released on Wednesday that said the impact on gross domestic product could reach $2.7 trillion." http://www.reuters.com/article/2011/07/27/usa-economy-infrastructure-idUSN1E76Q0J120110727
This country was incredibly foolish for not spending on infrastructure in 2008.
"Foreigners have already recognized our relative stability and are investing in government bonds."
Those who manage to believe that the fundamentals of owning US government bonds are in any way positive are welcome to invest.
This is not against MJG, but just a general upset about the soothsaying ("Oh, it'll be okay. Why? Because it always is and always has been.") and pointing fingers and fascinated by anyone who believes that the government in its current, broken form, can provide solid and sustained leadership to solve any of the problems that we face. Additionally, the "we'll get out of this because we always have" and the pointing fingers that "such and such country is worse" makes us feel a little better in the short-term, but fixes absolutely nothing.