Chasing

[Vincenzo Corleone]

Hi,

A couple of questions -

First, I should mention that both my wife and I are 38 years old.

We have money mostly in stock and bond mutual funds - mostly domestic, but some int'l - both in taxable and retirement accounts. Also have some money in stocks in my taxable account. Some of these funds and stocks I absolutely love - BRKB and MPGFX to be specific. With all the talk about the stock market trading sideways or down for the next decade, I'm wondering if I should sell and hold the cash for when a bargain appears. But I also am familiar with the concept of compounding and the velocity of money - benefits I would most definitely not get by selling. What do you think?

Also, I know that commodities are doing very well now. I'm very tempted to invest some money in something like PCRAX or the close-ended fund Jim Rogers runs. While I'm very tempted, I also know that chasing a trend - following the herd - can turn out to be disasterous. What do people here think? Am I too late to the party on commodities? Part of me thinks that I should just be patient and wait to find an asset that has been run down so badly that it is a bargain.

I'm sure that these questions have been asked a million times already. I appreciate your taking the time for this.

 

[JLP]

I have read most Jim Roger's book. It is an interesting book to say the least. I see nothing wrong with putting a small portion of a portfolio in commodities.

As far as which direction the market is going: NOBODY KNOWS! The "experts" can say whatever they want but the truth is none of them know where the market is headed.

I'm a firm believer in having an asset allocation plan and sticking with it through thick and thin. You'll drive yourself nuts trying to figure out which way the market is heading.

JLP

 

[GTM]

Hi,


Also, I know that commodities are doing very well now.  I'm very tempted to invest some money in something like PCRAX or the close-ended fund Jim Rogers runs.  While I'm very tempted, I also know that chasing a trend - following the herd - can turn out to be disasterous.  What do people here think?  Am I too late to the party on commodities?  Part of me thinks that I should just be patient and wait to find an asset that has been run down so badly that it is a bargain.

I'm sure that these questions have been asked a million times already.  I appreciate your taking the time for this.

I would place value on what Jim Rogers has to say. I recently bought the Pimco fund although you may want to consider the institutional shares PCRIX as opposed to the A shares PCRAX. Cheaper fund, less expenses.

From what I have read commodity bull markets run about 18 years so I do not think it is too late to get in if you plan on holding. I would also stay diversified in other asset classes as well including cash.

Nobody has a crystal ball but maybe one day someone will come along and

MAKE US AN OFFER WE CAN'T REFUSE

 

[preben]

JLP and GTM said it. A globally and asset class wise low cost well diversified portfolio is the way to go.
I (and many smarter than me) certainly think that adding PCRIX to a well diversified portfolio is a clever move. Check out www.raddr-pages.com for a great - easy to understand study of the added value.

Before considering commodities you should however first consider how much risk you want to take, adjust your equity/fixed income/other split accordingly and then stick to it.

Cheers, Ben

 

[Vincenzo Corleone]

I took the plunge and invested a small percentage of my entire portfolio in PCRIX. Thanks to the information I found on this board, I was careful to invest with funds in my non-taxable account.

Thanks to all who replied.