Is there always a wall of worry to climb?

[purplesky]

Just keep lots of cash in position to buy during the next real correction or crash.

This market is overpriced.

The state of the housing market and the shrinking middle-class cannot be ignored as you climb your wall of worry.

Disruptive technologies and companies in banking,finance,retail,cloud,oil,transportation,car manufacturing, mobile,cable/satellite,etc. are on my wall of worry as I own some individual stocks.

So looking forward at companies like US Bank, Microsoft, ATT , Verizon , Ford ,GM, GE , Coke , Pepsi , UPS, etc. it seems that disruptive technology and societal consumer change is becoming more intense.

Will all these companies still be around in 10 to 20 years. You would think so.

But will gas stations almost be gone in 15 years? (Remember pay phones)

Will self driving cars be the normal in 15 years?

Will shopping malls still be around.


Obviously people on here know diversification is key.

It should be interesting to see how the next 15 years go for investors and to see what certain sectors like retail and technology will look like.
Should be some big winners and lots of losers.


Not to mention the millions of college grad millennials who will still be renters in their 50s and still
broke.

I think I just answered the question. Yes there is always a wall of worry to climb.

 

[fanmail]

View attachment 21325


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vn

 

[cooch96]

I remember exhorting my Facebook friends in 2009 that it was a good time to invest. I got a few snide replies about how nice it must be to have money to invest. I believe the DOW also dropped another 500 points immediately after I posted and I got some more snide comments.

I don't know the best route for future wealth and I may not be playing the best odds (I have precious metals and prioritize paying off my mortgage early), but but most of my investments are in REiTS and value funds. And I stand by my 2009 encouragement to buy.

Hopefully there'll be one more strong buying opportunity in the next three years and then the market does nothing but climb for a few decades (one can dream, right?).

 

[sheehs1]

Wall of worry?

Putin. ISIS, Boko Harum, Hezbollah, etc. Iran with near nuke capabilites, NK and Pakistan already in the club. Global warming. Drought. Bird flu. Ebola. Justin Bieber...


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You forgot Yemen.

 

[Major Tom]

Putin. ISIS, Boko Harum, Hezbollah, etc. Iran with near nuke capabilites, NK and Pakistan already in the club. Global warming. Drought. Bird flu. Ebola. Justin Bieber...

Isn't that a Billy Joel lyric?

 

[EastWest Gal]

Everything is falling apart somewhere in the world all the time. Just keep us away from collisions with comets and supernovas and most of us will be fine for most of our lives.


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[MRG]

Isn't that a Billy Joel lyric?

I've been infected by an earworm.

 

[HFWR]

Isn't that a Billy Joel lyric?

If it must be someone's lyric, how about...

http://youtu.be/miZWYmxr8XE


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[Major Tom]

Yeah, that too

 

[UnrealizedPotential]

UnrealizedPotential - you sound to me like the kind of investor who should be gradually dollar cost averaging into the market via index funds, over the long term. That way, you are not focused on when is a "good" or "bad" time to get into the market, as you are "getting into it" constantly, regardless of the myriad of influences in the economy and media landscape that could scare you.

If you truly take the long term view that the future looks pretty good, then the bumps along the way won't trip you up.

Well, I have seven mutual funds. Yes, you are right Major Tom . I invest when I can regardless of market conditions. Some months the extra money is not there. Sometimes it is. It just depends. I invest in what I understand the best. I can wrap my head around the SP500, reits, small cap, and equity income and value. Biotech I would be lost. But that is just me . Still working on $250k in investable assets, I have almost 225k now. My next goal is to open a bond fund. A small position. It will be nice to say I have a quarter of a million. If you count the home equity I am far beyond it. But I don't because it's not liquid. I also wanted to mention I have almost 50% in Equity income fund. It's my favorite, always has been.

 

[Terryjm51]

So how much cash should someone have lying around. 1 2 3 years of annual income ?



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[Dash man]

So how much cash should someone have lying around. 1 2 3 years of annual income ?



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Whatever lets you sleep well at night.
I keep at least five years expenses in cash, but we are fortunate to still have significant stock holdings to allow us to keep up with any inflation that might kick in. The idea of at least five years in cash is to be able to weather a severe market downturn. At our current level of spending we might last as long as ten years with our cash/CDs. We don't own any bonds.

 

[audreyh1]

So how much cash should someone have lying around. 1 2 3 years of annual income ?



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It really depends on the individual. We tend to have about 2 years expenses. But we also have funds set aside for travel splurges or other big ticket items such as new car or home improvements.

 

[petershk]

Agree. I think the sleep at night factor is key.

I also think about the "don't do anything stupid" factor is important.

Let's say market drops 20% this year and 30% next year. How much cash do you need to not sell everything in a panic and instead stick to whatever you "when things go bad" strategy is?

For me it's about 3 years. I tell myself at the end of year two I'll use year 3s money to buy low if that's still the case... But I won't know if I'll actually so that until it happens . In the mean time I'll have to fight my emotions and rebalance buying the hammered stuff.

Hoping those who have been through this already will help keep the crazy away.

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