tangomonster
Full time employment: Posting here.
- Joined
- Mar 20, 2006
- Messages
- 757
When we ERd a couple of years ago, we swore we wouldn't panic with a down/bear market. We intended to just leave our money in for the long-term (50% in muni bonds, 50% in mutual funds).
BUT-----with the little I understand about economics and cycles, I've been feeling that maybe the old wisdom of sitting tight didn't hold, that there are too many negatives and changes to promise that things will turn around anytime soon. My husband made me call our Fidelity broker because he was tired of listening to my doom and gloom. He was sure that the broker would advise us to keep cool and not react/overreact.
As much as I usually love being right angel, this is one case where I wish my husband (much more optimistic than me in every aspect of life) had the right idea. According to the broker, he doesn't. The broker says that he was sure that the market would improve for the second half of the year, but now he (and the gurus at Fidelity) are convinced it will get worse---and stay bad for the next couple of years. He thinks we need to decrease our mutual fundings at least 15% and get rid of the index funds, which are so heavily in the financial sector. He thinks that the only sectors that can make money are commodities and utilities. He also thinks that bond/funds, especially global, will be good (Brazil will supposedly be a major player in the new world economy) and to "overweight in cash, using cash as an asset class."
The broker said that everything we have been doing (and just discussed with him less than six months ago) is invalid (like allocating for growth, balance, diversity, looking at midcaps vs. small and large): "the paradigm has completely changed."
Fidelity is sponsoring a free seminar to advise investors and we will be discussing this further with the broker next week. I'm almost positive that we will reduce our positions and will focus on preserving our assets rather than growing them. So is this panic---or just following my broker's advice?
BUT-----with the little I understand about economics and cycles, I've been feeling that maybe the old wisdom of sitting tight didn't hold, that there are too many negatives and changes to promise that things will turn around anytime soon. My husband made me call our Fidelity broker because he was tired of listening to my doom and gloom. He was sure that the broker would advise us to keep cool and not react/overreact.
As much as I usually love being right angel, this is one case where I wish my husband (much more optimistic than me in every aspect of life) had the right idea. According to the broker, he doesn't. The broker says that he was sure that the market would improve for the second half of the year, but now he (and the gurus at Fidelity) are convinced it will get worse---and stay bad for the next couple of years. He thinks we need to decrease our mutual fundings at least 15% and get rid of the index funds, which are so heavily in the financial sector. He thinks that the only sectors that can make money are commodities and utilities. He also thinks that bond/funds, especially global, will be good (Brazil will supposedly be a major player in the new world economy) and to "overweight in cash, using cash as an asset class."
The broker said that everything we have been doing (and just discussed with him less than six months ago) is invalid (like allocating for growth, balance, diversity, looking at midcaps vs. small and large): "the paradigm has completely changed."
Fidelity is sponsoring a free seminar to advise investors and we will be discussing this further with the broker next week. I'm almost positive that we will reduce our positions and will focus on preserving our assets rather than growing them. So is this panic---or just following my broker's advice?