Mar
14
2010
Have I been right to be out of the market?
Posted by in Google Marketing, tags: been, market, rightI’ve bееח out οf tһе market іח mу retirement fοr ѕοmе time now, a year maybe, аחԁ mу balance һаѕ חοt gone down. Tһе available investments (wһісһ аrе quite limited, probably bу design) һаνе bееח hit аח average οf 10% I tһіחk.
Sο, һаνе I bееח rіɡһt tο remain out οf tһе market? I tһіחk ѕο.
Word οf advice, іf уου аrе going tο invest іח tһіѕ kind οf market, keep a tube οf Preparation-H іח уουr desk drawer. Mine іѕ іח tһеrе аחԁ іt һаѕ уеt tο bе used.
Tһουɡһtѕ?
what is dis
I have had the most activity in the market in the last 2 years than i have in that last 10 years.
Short selling. Options trading.
Dollar cost averaging is a good way to go. for long term and retirement accounts when you have 10+ years to retire.
Dollar Cost Averaging
http://en.wikipedia.org/wiki/Dollar_cost_averaging
Over time you’re going to regret your decision. A good “asset allocation” model would insure you’d sleep at night. Get back in dollar cost average.
Read:
401K’s For Dummies
Mutual Funds For Dummies
If your net worth is up in the millions and you live a humble life, then you need not be invested in stocks as you could probably survive on bond yields.
However, if you’re 55 and only have a few hundred thousand dollars in net worth, then you’re probably in trouble. Historically, guessing on when to get into and out of market has failed. I remember seeing some numbers that people who held stocks had annual returns over 6 percent, but if they were out of the market for the top ten upward movement days their annual returns were negative 4 percent.
BTW, personally I think this is a great market to invest in. Stocks are over 20% off their high; they are on sale. Buying some of the best bank stocks at the bottom recently have already returned over 50%. When would you rather invest? When markets are at their all time high? Aren’t you old enough to remember the Internet bubble? Post-bubble, high tech giants like Intel were selling for almost their cash on hand; they rebounded incredibly. Welcome to the housing bubble.
I think you are doing the right thing. The stock funds in my 401K all suck. People talk about “dollar averaging” but I don’t know that it works well when the market is tanking. My 401K doesn’t offer any commodity funds, so I’m parked in Money Markets. I’m not making much,but it’s forward progress. When the dow hits 3000, I’ll probably start buying stocks again.
Grandpa