Hi Nash*, Thanks once again. Some questions / clarifications: 1) Curious - do you use technical indicators, price/volume/p/e,... to determine when to buy/sell, or buy & hold? 2) Contrarian - never considered I eliminated market risk, but it does. 3) What theory are you referring too? 3) Agree most forecasters are only right some of the time, maybe only x1; 4) liked Nash: "The problem is executing that strategy: you have to be right twice. You have to buy at the low and sell at the high without knowing when the lows and highs are. You could sell everything today and miss out on another 30% gain. You could sit with hundreds of thousands of dollars on the sideline convinced of a market correction that never comes and miss a subsequent 30% gain."
But as we get older and cannot accept a long-term risk, what to do? We need $ to live. Thanks!
1) No. I am aware of PE, Shiller PE, etc., but I do not use them to determine when I buy and sell. I buy periodically - monthly in IRAs, 403(b)s, bi-weekly in taxable account, all set up automatically. I "sell" when my asset allocation dictates so (i.e. stocks go up giving me more than 90% of invested assets in stocks... sell stock funds, buy bond funds to get it back down to 85%, and vice versa). I have no interest in attempting to forecast where I think the market will go based on anything. If there was a method that worked consistently, everyone would use it and it would no longer work.
2) Think you missed the point. By sitting in cash, you maximize inflation risk. If by "contrarian" you mean you sell when others buy, and buy when others are selling, I understand that line of thinking. I do not agree with it, but I understand why you would - going against the mob historically has worked in favor of contrarian investors. I just think it's a pretty arbitrary way to secure your financial future, and if that IS what you mean by contrarian, then it most assuredly does NOT eliminate market risk.
I disagree that you can't accept long-term risk as you get older. That may be the case for you, but it is certainly not the case for everyone. Plenty of older investors are 70% or more in the equity market. And as I said, when you reduce "market risk" by limiting exposure to equities, you are often exposing yourself to more "inflation risk". "Inflation risk" is a bigger long-term problem; "market risk" is more of a worry in the short-term.
You, however, are not "old". You have a 40-year or so retirement horizon. While it's not my place to say, I think you're looking at this whole problem backwards. But your risk tolerance is just that: yours (NOT your financial advisor's!!!!)
. " you sound like the type of person who would do exactly what I mentioned in my first paragraph: buy high, sell low and get wiped out." Has not happened ever since 1974. Shorted NASDAQ in 1999, sold rest of stock. Sold house in 2006 & now rent. No debt. Just cash. P.s. For some reason I feel no emotions about investments, really, it is as it is, I'll just change it. 
