If you have cash now is a good time to buy.
If you have cash now is a good time to buy.
That depends on what you are buying...we are far from bottom in some sectors. I feel for people who have lots of money in 401ks and have not been paying attention.Originally Posted by LL2
C.H.U.D.
Even with the horrible start to this year our retirement fund is up almost 10% for the year. If by 2nd qtr the market starts turning around we will be looking pretty good this year.
I would expect that the market is going to be a roller coaster probably until November's general election.
Both Obama and Clinton have already laid out plans for enormous increases in social spending and aren't shy in directly attacking the business community.
I think we are all in for a bumpy ride until the next president is certain and business leaders can get a sense of how hostile the new administration will be.
Some good advice.
February 17, 2008
Keep It Simple, Says Yale’s Top Investor
By GERALDINE FABRIKANT
IT has been a time to worry even the savviest investors. The credit markets have been in a crisis, the domestic stock market has been shaky and overseas markets haven’t been much better.
What should an individual investor do?
Don’t try anything fancy. Stick to a simple diversified portfolio, keep your costs down and rebalance periodically to keep your asset allocations in line with your long-term goals. That is the advice of David F. Swensen, who has run the Yale endowment since 1988, relying on a complex strategy that includes investments in hedge funds and other esoteric vehicles. The endowment earned 28 percent in its last fiscal year, which ended June 30, beating all other endowments. It finished the year with $22.5 billion.
For most people, he recommends a very basic approach: use index funds, exchange-traded funds and other low-cost instruments, and stick to your long-term asset allocation — even when the markets are in tumult.
Don’t be distracted by market forecasts, he said. “You have to diversify against the collective ignorance,” he said. “I think nobody is in a position to react to these big macro-issues. Where is the dollar going to be or what is G.D.P. growth going to be in China? For every smart person on one side of the question, there is another smart person on the other side.”
For most individual investors, he said, copying the strategies of institutions like Yale is virtually impossible: big investors have access to fund managers and arcane strategies that are beyond the reach of most people.
“The only people who should get involved are sophisticated individuals who have significant resources and a highly qualified investment staff,” Mr. Swensen said.
“Most people do not have the resources and time to pick market-beating managers” of hedge funds, private equity funds or funds of funds, he said. And he said that the techniques used by hedge funds often result in higher taxes than those of index funds.
So he advocates another approach, which he outlined in the book “Unconventional Success: A Fundamental Approach to Personal Investment” (Free Press, 2005). He proposes a portfolio of 30 percent domestic stocks, 15 percent foreign stocks, and 5 percent emerging-market stocks, as well as 20 percent in real estate and 15 percent each in Treasury bonds and Treasury inflation-protected securities, or TIPS.
The real estate investment can be made through real estate index funds. Though the real estate market has declined and your portfolio is below its target allocation to it, he said, don’t try to time the market. Go ahead and rebalance because no one really knows where the market’s bottom is.
Diversification will buffer a portfolio from declines in specific asset classes. For example, he said: “If the dollar declines dramatically, you have foreign and emerging-market equities. And a declining dollar may well be associated with inflation, but a diversified portfolio would include TIPS,” to provide a hedge. “That means if any of these scenarios play out, an investor has sizable chunks of his portfolio that protect against them,” Mr. Swensen said.
When possible, he said, rebalancing should be done in a tax-sheltered account, like an I.R.A. or a 401(k), to avoid tax liabilities. “When you are putting fresh money to work,” he said, “you put it in an asset class where you are underweight and take money out of a class that is overweight.”
He says it is fruitless for individual investors to pick stocks. “There is no way that an individual can go out there and compete with all these highly qualified and compensated professionals,” Mr. Swensen said.
HE criticized the approach of Jim Cramer, the CNBC host, who encourages investors to trade stocks in strategies that Mr. Swensen says cost heavily in commissions and taxes.
“There is nothing that Cramer says that can help people make intelligent decisions,” Mr. Swensen said. “He takes something that is very serious and turns it into a game. If you want to have fun, go to Disney World.”
Brian Steel, a spokesman for CNBC, responding on behalf of Mr. Cramer, said Mr. Cramer “had a long history of success as a trader and fund manager.” He added that Mr. Cramer is a proponent of long-term investing and thorough research.
Mr. Swensen says investors should forget market timing entirely. Once an individual sets up a program, it should be rebalanced quarterly or semiannually, he said, “but it should be disciplined.”
When the markets decline, try not to pay attention, he said. “Let yourself off the hook,” he said. “If you pursue the sensible long-term policy, look at it over a 5- to 10-year period. Don’t look at five months.”
C.H.U.D.
Taxes and Bowling
Higher taxes are coming, that's for sure.
In the category of unintended consequences is that Milwaukee may lose part of its historic culture - The United States Bowling Congress headquarters might be moving.
Potential bowling loss hits city's heart
(from the article)
The relocation of the USBC, the sport's governing body, to Arlington, Texas, isn't quite a done deal. Chief operating officer Kevin Dornberger (190 average) warns that Milwaukee must find ways to reduce the cost of doing business here to keep the group and its 195 employees in suburban Greendale.
There are no personal income taxes in Texas, Dornberger says, and health care costs and real estate taxes are more affordable there. Arlington might offer tax incentives. Dornberger has asked officials here for a proposal today, and a decision will be made by March 14, when the USBC's contractual hold on property in Arlington expires. The USBC's board of directors voted in January to start negotiations for a move, which would happen this year.
(edit)
If the organization does head South, it would end a relationship that dates back to 1907. That's when the USBC's predecessor organization set up shop here, says Doug Schmidt (190 average), author of a 2007 book on Milwaukee's bowling history, They Came To Bowl: How Milwaukee Became America's Tenpin Capital.
Human nature is interesting.....
Light Crude Oil closes at over $100 a barrel for the first time and the prediction is for $4 gasoline by Spring.
Do you remember the absolute panic in the media when oil crossed the $65 barrier before the 2006 mid-term elections? Then they began to dramatically fall. Conspiracy theories were everywhere.
Now Light Crude is up 70% IN A LITTLE OVER ONE YEAR and hardly anyone is commenting about it.
As Vince Lombardi said, "What the hell is going on out there?"
Crude oil is at a record high....the dollar is worth less than toilet paper and the US is the worlds leading debtor nation.
No worries.
C.H.U.D.
....be happy!
Couldn't have said it better myself.....be happy!
http://www.youtube.com/watch?v=yjnvSQuv-H4
C.H.U.D.
HOFer
I still remember the surplus and all the fighting about what they'd do with it. That was a nice problem to have.
"Greatness is not an act... but a habit.Greatness is not an act... but a habit." -Greg Jennings
Bear Stearns accepts emergency funding and stock drops over 40%. They will probably not be an independent company much longer.
http://money.cnn.com/2008/03/14/news...ion=2008031414
Ring the bells that still can ring
Forget your perfect offering
There is a crack, a crack in everything
That's how the light gets in - Leonard Cohen
When is this stock market going to start going north again? So far this year the market is back to where it was over a year ago. I do wish I had $20k to but some stocks that are on sale.
Which ones do you like?
HOFer
Hey, does this mean they're buying my new 401K stocks cheap? Bonus!!
"Greatness is not an act... but a habit.Greatness is not an act... but a habit." -Greg Jennings
We own them now.......what a joke. But I can see the FED having to do something because there was a run on the bank and they did not have the $$ to cover it.
C.H.U.D.
About a month ago I bought stock in netgear (NTGR), Etrade (ETFC), American Oriental Bioengineering (AOB), and Tata Motors (TTM). I tought they were good buys at the time and I think they are better buys right now. There are a few others I own too, but can't think of them right now.Which ones do you like?
It appears the Fed was worried that Bear Stearns going under would have a ripple effect on Wall Street. http://www.washingtonpost.com/wp-dyn...?nav=rss_printWe own them now.......what a joke. But I can see the FED having to do something because there was a run on the bank and they did not have the $$ to cover it.
The debate is whether it was really potentially that bad, or whether the Fed panicked.
Ring the bells that still can ring
Forget your perfect offering
There is a crack, a crack in everything
That's how the light gets in - Leonard Cohen
Just my opinion, I'm not a big fan of the government's latest moves (meddling in the sub-prime market, stimulus checks and bailing out Bear, Sterns).
Politicians create the climate for economic problems and then, borrowing words from Obama's pastor, Jeremiah Wright, begin to panic when "the chickens come home to roost." This is especially true during an election year.
Some people are benefited, of course, but at what cost to the integrity of America's overall financial system?
A guy from Singapore I met in the Philippines recently reminded me of the familiar adage regarding economics, "When America sneezes the rest of the world catches a cold." Sound economic policies do matter, not just in America, but also in the economies of nations across the globe.
Of these, I think AOB is the most interesting long term. In addition, I love the Asian values from their website, "AOBO will bring greater happiness, health and love to the world!"About a month ago I bought stock in netgear (NTGR), Etrade (ETFC), American Oriental Bioengineering (AOB), and Tata Motors (TTM). I tought they were good buys at the time and I think they are better buys right now. There are a few others I own too, but can't think of them right now.Which ones do you like?
I'm already into ALU so that cancels NTGR for me. I expect CSCO to gain market share in the future.
ETFC is scary, definitely short term IMHO, and TTM, well, gotta give them credit for marketing a $2,500 "the People's Car." Just don't hit any cows on the Indian roads in this all-aluminum car.
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