I've been checking my investment portfolio lately and with the market rebound the past few months, my portfolio has exceeded it's 2007 peak return high. So it's not surprising that articles such as the
following at Yahoo Finance have started to show up. Let me paste a few select quotes from it:
Like millions of ordinary investors, Cindy and Eric Canup are still recovering from Wall Street's big downturn. Their portfolio is off by 25 percent.
...
Recently, with help from their financial adviser, they nudged some of their cash into mutual funds and took on riskier investments.
...
Now, some of the money that fled stocks for safe harbors like
money-market funds and government bonds last year is beginning to
return. Even with trillions still sheltered on the sidelines, some $56
billion has poured into equity funds since April, according to the
Investment Company Institute.
What we have is people selling after their portfolios dropped 25%-30% and now buying back again after the market has rebounded +20%. This is why most people lose money in the market and would be better off with pensions + social security. The idea of buying low and selling high is easy to toss around but is extremely hard to do in practice because every fiber in your body says SELL SELL SELL when the market is dropping like a rock.
My advice: if you can't stick with an investment plan -- ie, continue to dollar-cost-average and rebalance faithfully through thick and thin -- just get out of stocks altogether and put everything in bonds.
(Filed in investing)
The wrong way to invest
Posted by Mossy
September 20, 2009 8:37 AM
What we have is people selling after their portfolios dropped 25%-30% and now buying back again after the market has rebounded +20%. This is why most people lose money in the market and would be better off with pensions + social security. The idea of buying low and selling high is easy to toss around but is extremely hard to do in practice because every fiber in your body says SELL SELL SELL when the market is dropping like a rock.
My advice: if you can't stick with an investment plan -- ie, continue to dollar-cost-average and rebalance faithfully through thick and thin -- just get out of stocks altogether and put everything in bonds.
(Filed in investing)
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