Just diversify across asset classes and you’ll be protected from all potential harm. Or so the story goes from Wall Street, and the many Wall Street minions across the brokerage world.
Just buy a smattering of stocks and/or mutual funds, hold for the long term, and all will be right with the world, and your financial security.
Everywhere I turn it seems the same old story continues. Diversification, Buy and Hold, Modern Portfolio Theory, the beat goes on and on. Read the rest of this entry »
Are we destined to go down that same road, the road traveled by Japan over the last 20 years.
As you probably know the Japanese stock and real estate bubbles preceded ours by a few years, and they’ve been mired in a no growth/slow growth economy ever since.
Could it happen here? Is it already happening? Certainly questions no one can answer with certainty. The real question is are we ready for such a scenario? What steps can we take to handle and even prosper from such an outcome? Read the rest of this entry »
8/30/09
Yes, the bull is back! I believe we are in the early stages of a new bull market. Even with all the bad news still on the table, this bull is showing some sturdy legs.
Supporting my view is the chart at the right. It’s a picture of the S&P 500 over the trailing 10 year period. The choppy green line is the price line of the S&P 500, the solid orange line is the 10 month moving average. (I’ve simply converted the 200 day moving average to 10 months for clarity.)
Note the solid line turning up in late 2003, when the market went from a low of just under 800 to its peak of nearly 1600 in late 2007. Take a look at the same moving average line all the way to the right of the chart. It has finally moved up after a near free fall from late 2007 to it’s current up position. This to me signals a new bull market, and it’s time to buy. Read the rest of this entry »
5/29/09
Even though the stock market has rocketed skyward since the March lows we remain in a ‘Bear’ Market. You may be wondering how I can be so certain. After all, hasn’t the market risen 35% or so since the March lows? The answer is yes it has. But some of the key indicators have not yet turned up enough to signal the resumption of a new ‘Bull’.
One of the important indicators I use to help manage risk is called the 200 day moving average. I’ve analyzed it back to the early 1970′s and it has demonstrated a high degree of reliability in signaling the beginning and end of both Bull and Bear markets. Not infallible, but reliable. Read the rest of this entry »
Many people, professionals and amateurs alike, believe in the old adage, ‘Buy and Hold for the Long Term.’ They believe once your investment program is in place you should not make changes due to market declines, even when those declines are as severe as they’ve been the last 13 months.
Just about all investment markets in the world have cratered 40% or even more over that 13 month period. The Dow Industrials, S&P 500, and NASDAQ stock indices are off 31%, 37%, and 42% respectively from January through late November 2008! I believe these losses, even though temporary, are too great for all but the most aggressive investors to endure. There has to be another way, a way we can reap the returns the markets have to offer without putting ourselves at risk of suffering these unbearable losses. Read the rest of this entry »
9/02/08
Has your portfolio been savaged by this new edition of a ‘Bear Market’? Are you feeling there’s no end in sight and have no hope of recovering what has been lost? Well, there are solutions and I hope to offer a few here.
Make no mistake, we are in a longer term ‘Bear Market’ and there is no way of knowing when it will end. Having said that there are a number of strategies you can use to protect yourself, as outlined below. Read the rest of this entry »
7/03/08
If you ask people who the most successful investors are, you’ll probably get responses like Warren Buffett of Berkshire Hathaway, John Neff, formerly of Vanguard’s Windsor Fund, or George Soros, the famous hedge fund manager.
However, some of the most successful investors from a risk/reward perspective are the large university endowment funds. This group includes universities with endowments larger than $1 Billion such as Yale, Harvard and Vanderbilt. (Source: 2007 NACUBO Endowment Study) Read the rest of this entry »
Be on guard, for the annuity salesman cometh, and he/she is poised to take advantage of you, your lack of knowledge, and yes, even your fears.
This breed of salesperson is most often seen at luncheon and dinner seminars, which are marketed heavily to retirees, for retirees have the money. As the infamous bank robber Willie Sutton, when caught robbing banks for the umpteenth time, was asked why he continued to ply his trade, Willie purportedly replied, “…because that’s where the money is.” Read the rest of this entry »
3/13/07
Is the next “Bear Market” just around the corner? Was the recent market correction a harbinger of things to come? No one can know the answer to these questions, but there are a number of steps each of us can take to prepare for the next Bear which, sooner or later, is surely on the way.
The preparation should begin now, whether you are a new investor, or have already amassed a sizeable portfolio. The objective is to protect it from the ravages of the bear as it emerges from its four year slumber. Read the rest of this entry »
