Thoughts on investing in current market climate

[novaman]

So the news is not encouraging. Real estate downturn, sub prime mess, weak dollar, inflation--stagflation.

What are your thoughts on investment strategies for today?

 

[SecondCor521]

Best time to buy.

2Cor521
Contrarian

 

[Art G]

We are trading within a range right now, and it's still up in the air which way we are headed. Watch the DOW to see if it either gets above 12,920 or below 11,990. I'd rather wait for the signs of a breakout and miss a little upside, than to bottomfish and be wrong.JMO

 

[al_bundy]

made a few % on some really short term trading just to really learn technical analysis with a pot of money i can afford to lose

i think the market is going lower because the current trend is down and we have had a short rally with an upward trend which is against the current longer term trend. add to this the fact that the latest trend is lower average volume than the downward moves and this is enough for me to stay away. wall street is just waiting for an excuse to send the market lower

 

[jIMOh]

BUY.

I am buying my normal allocation, plus I created a new position in a fund to double as a secondary emergency fund and house repair fund. PRPFX- which owns bullion and swiss francs, along with some US growth stocks.

 

[aworkingrachel]

I'm in the market for the long, long term so I echo the "BUY"s.

 

[unclemick]

"God Looks After Drunkards, Fools, And The United States of America.'

Need I say more - nod, nod, wink, wink! .

heh heh heh - age 64, 15th yr of ER, 60% of income is 100% from Target Retirement 2015 (hot rod version of the traditional pension 'policy portfolio' of ancient times ala 1980 and earlier). Not to worry.

Plus some fun money 15% individual stocks cause I'm male and not dead yet - to keep the hormones happy don't you know.

 

[novaman]

Actually I was thinking about asset allocation- moving out of treasuries into stocks? moving out of bonds?

 

[mn54]

Looks like Ben B. will be lowering the rates again next month. Not a good time to be buying bonds. I would keep my money in short term MM and look for buying opportunities in hard hit stocks with little downside risk.

 

[DblDoc]

+1 to buy
Just keep adding to my AA every month

DD

 

[Notmuchlonger]

Buy next year you will be going yewhahahw thankfully I bought in 2008. Or I could be wrong and you could be cursing me.

 

[FIREd]

I use value averaging to determine where to invest new money. Last month, I added money to REITs, small caps and international stocks. This month, my spreadsheet says that I should be adding to emerging markets and US large caps. I haven't added new money to cash or bonds since last October.

 

[mathjak107]

we all think its headed lower.... that means it will probley go up from here.

with one exception when i guessed right its risen and left me behind everytime i think im smarter and outlooks are a given. i always have gotten out at the right time but the getting back in part kicks my ass everytime. ....... its always the stuff not on the radar yet that sends us rockin and a reeling either up or down.

 

[mbooth]

Long time lurker, first time poster (and I'm an Aussie so take my comments with a grain of salt!)

Seems to me the question itself goes against the grain of common wisdom. Don't even try to judge/guess/ride the 'current market situation'.....just pick a strategy and stay with it. Of course diversification, in whatever allocations 'you' are comfortable with seems to be sensible.

If you are FIRE investing for the long term, today's indigestion will be seen to be a minor glitch.

Unless of course this is the precursor to total world-order economic meltdown, in which case ignore me , I'm probably wrong!

Cheers - Mick

 

[freebird5825]

BUY
if i had more disposable income, i would be so all over the stock market (mutuals only for me) right now. but, ho hum, just keeping my usual DCA going.
i'll echo the "keep to your strategy" advice. remember the tech bubble bursting not so long ago. and now the real estate bubble bursting...

 

[headingout]

I say keep buying. I'm gradually rebalancing from bond funds into equity funds, mostly mid-cap value and real estate. We would have loved these prices last fall when the Dow was at 14,000. But DCA and keep some cash available through 2008 should the market go lower.

 

[Robert the Red]

What's the time frame? So much have I heard people kvetch about "I'll wait until December because I think the market will go down a little by then". If your time frame is 3 years, that argument has a superficial logic. But only superficial, because 3 years means you should be in "the market" anyhoo. And if your time frame is 20+ years (which means you are anything under 65-70), then as Nords implied, you don't have a choice -- have to be in "the market" -- there's only one climate.

What people usually mean by the "current market climate" is more like the "current market weather" -- the fact that it's cold today doesn't disprove global warming.

 

[Spanky]

Ignore the current climate and stick to your strategy.

 

[megacorp-firee]

bad times lead to 2nd guessing.
1) stick to your plan ..
2) unless you think you're plan is not working.
...then fix your plan and go back to step 1

 

[W2R]

Like the others have said, a good plan is your ally in times of inflation and falling dollar. Or, so I understand and trust is the case.

Equities are important to protect you from inflation. A decent proportion in internationals will help you as the dollar falls. Bonds and small caps will strengthen your portfolio too, and make it more robust. All of the qualities of a good, diversified portfolio are meant to help you when economic times get rough. For information on how to construct such a portfolio, read some books with sound investment information such as The Four Pillars of Investing by William Bernstein, The Only Guide to a Winning Investment Strategy You'll Ever Need by Larry Swedroe, The Bogleheads' Guide to Investing by Taylor Larimore et al., and All About Asset Allocation by Richard Ferri.

Personally I didn't wait to buy my plan's designated proportion of Wellesley, but I am moving a little more gradually into the index equity funds in my plan. I should have everything in place by late spring. As others have said, equities are essentially on sale this winter/spring.

I have a very small Roth IRA that presently represents less than 2% of my portfolio. I regard it as the part of my portfolio that I allow myself to play with (in a rather conservative way, I admit). Eventually I would like to have it in REIT's. I will wait a little longer before moving it into REIT's and try to catch them on the upswing, which might take a while at this rate. That is my main concession to the "dirty market timers".

 

[freebird5825]

Like the others have said, a good plan is your ally in times of inflation and falling dollar. Or, so I understand and trust is the case.

Equities are important to protect you from inflation. A decent proportion in internationals will help you as the dollar falls. Bonds and small caps will strengthen your portfolio too, and make it more robust. All of the qualities of a good, diversified portfolio are meant to help you when economic times get rough.

Personally I didn't wait to buy my plan's designated proportion of Wellesley, but I am moving a little more gradually into the index equity funds in my plan. I should have everything in place by late spring. As others have said, equities are essentially on sale this winter/spring.

I have a very small Roth IRA that presently represents less than 2% of my portfolio. I regard it as the part of my portfolio that I allow myself to play with. Eventually I would like to have it in REIT's. I will wait a little longer before moving it into REIT's and try to catch them on the upswing, which might take a while at this rate. That is my main concession to the "dirty market timers".

lowest cost REIT fund i've found is VGSIX. it's one of my Roth IRAs. take a look at
Vanguard REIT Index Report (vgsix) | Snapshot

the fund is not a happy camper right now. better times down the road?

 

[W2R]

lowest cost REIT fund i've found is VGSIX.

Actually, that is exactly the fund I am following and plan to get into, but LATER... as you suggest! My portfolio is 100% Vanguard so I suppose the selection of Vanguard's only REIT fund for my REITs is pretty predictable for me. I have been following the prices of that particular fund on a daily basis for months, for that reason.

I can bide my time and get into it on the upswing, as I stated above. That is my one concession to the "dirty market timers".

Oh, I edited my post that you quoted, in order to add some good references on building a diversified porfolio. Since it ended up on the last page, and since you happened to catch it while I was looking them up, here it is again:

Like the others have said, a good plan is your ally in times of inflation and falling dollar. Or, so I understand and trust is the case.

Equities are important to protect you from inflation. A decent proportion in internationals will help you as the dollar falls. Bonds and small caps will strengthen your portfolio too, and make it more robust. All of the qualities of a good, diversified portfolio are meant to help you when economic times get rough. For information on how to construct such a portfolio, read some books with sound investment information such as The Four Pillars of Investing by William Bernstein, The Only Guide to a Winning Investment Strategy You'll Ever Need by Larry Swedroe, The Bogleheads' Guide to Investing by Taylor Larimore et al., and All About Asset Allocation by Richard Ferri.

Personally I didn't wait to buy my plan's designated proportion of Wellesley, but I am moving a little more gradually into the index equity funds in my plan. I should have everything in place by late spring. As others have said, equities are essentially on sale this winter/spring.

I have a very small Roth IRA that presently represents less than 2% of my portfolio. I regard it as the part of my portfolio that I allow myself to play with (in a rather conservative way, I admit). Eventually I would like to have it in REIT's. I will wait a little longer before moving it into REIT's and try to catch them on the upswing, which might take a while at this rate. That is my main concession to the "dirty market timers".

 

[Art G]

I think this is the ideal market for dollar cost averaging. That and holding back some cash.

 

[freebird5825]

Actually, that is exactly the fund I am following and plan to get into, but LATER... as you suggest! My portfolio is 100% Vanguard so I suppose the selection of Vanguard's only REIT fund for my REITs is pretty predictable for me. I have been following the prices of that particular fund on a daily basis for months, for that reason.

I can bide my time and get into it on the upswing, as I stated above. That is my one concession to the "dirty market timers".

Oh, I edited my post that you quoted, in order to add some good references on building a diversified porfolio. Since it ended up on the last page, and since you happened to catch it while I was looking them up, here it is again:

bargain basement prices rule...i have a preferred morningstar subscription, so if you need some VGSIX data, let me know.

 

[Art G]

Is that REIT fund Global? I think you're way early on trying to bottom fish the domestic REIT market. JMO.