IGX

I am sitting in the middle of San Francisco/Silicon Valley-the parallels to 1999 are everywhere. Too much money, insane housing prices, too many stupid dot com ideas getting funding and too many cocky 30 year olds that think the party will last forever.

I've also been spending too much time here: http://www.zerohedge.com/ This is the tin foil hat crew that says the sky is falling, except for the most part they are very smart and led by a former hedge fund manager/insider.

I just moved 70% of my retirement savings to cash. They say you can't time the market, but I'm convinced we're headed for a massive crash or at least unpleasant "correction".

Anyone else pay attention to this stuff?

The trend is still up despite the sell off in momo names and small caps and the rotation to more defensive sectors. Guessing tops is a game few can play correctly. Price is the final arbiter not the number of 30 y/o zillionaires. Additionally, Yellen recently tiptoed back from the previous talk of rate hikes that spooked the market. Zerohedge is as bad a place as any to use for market timing. They have been calling for the end of the world for a long time...eventually they will be correct. There will be an end to this trend as with every trend but it can go on a lot longer than the majority think.

lasalle wrote:Anyone else pay attention to this stuff?

No, it's a waste of time.

I have all of my retirement money going into index funds, and I don't bother checking their performance more than once or twice a year. As I approach retirement age (whatever that is in academia), I'll start moving money into more conservative investments. Until then, it makes no sense for me (or anyone else who doesn't invest for a living) to worry about this stuff. There are better things to worry about.

IMO, no one is smart enough to time the market. Just like no one can predict the outcome of the next coin toss. But suckers will buy books written by those who called "Heads" and were lucky.

You have to know how much risk you can tolerate. As you approach retirement, you become increasingly risk-averse because a market downturn can last for a number of years.

I'm pondering Antifragile by Taleb, and risk in general. And I'm interested in what Freki & others think.

Well, I think that there are some professional investors who can time the markets, at least some of the time. The folks who successfully shorted mortgage-backed securities in the run up to the '08 crisis spring to mind. But the likes of you and me? Naw.

The market tends to go up over time; that is, if I put $1000 in today, the chances are pretty good that in ten years it'll be worth more than $1000. Or, I could need the money during a down market and bust out. But them's the breaks

vanguard index funds.

vanguard expense ratio is low compared to other funds or advisers. you may not be able to time the market, but you can manage your cost.

dead man walking wrote:vanguard index funds.

vanguard expense ratio is low compared to other funds or advisers. you may not be able to time the market, but you can manage your cost.

Vanguard is what we have our stuff in. We've been putting our Roths into Vanguard funds for quite a while. We took a shit kicking in 06/07 but we're back ahead again.

S&P 500 indices popped over 30% last year. Kind of flatlining this year. Momentum players and bio has been getting slapped around.

All in right now, though my trigger finger is getting itchy on the old "get out in May" slogan.

Might move 25% to cash, might not. Today was another, not yet day.

What retirement savings?

johno wrote:IMO, no one is smart enough to time the market. Just like no one can predict the outcome of the next coin toss. But suckers will buy books written by those who called "Heads" and were lucky.

You have to know how much risk you can tolerate. As you approach retirement, you become increasingly risk-averse because a market downturn can last for a number of years.

I'm pondering Antifragile by Taleb, and risk in general. And I'm interested in what Freki & others think.

I'm very much of the value school when it comes to this stuff, I look for dividends and indexing as outlined by others. Nothing fancy. I'm really big on dollar-cost-averaging, I simply try to not touch it and try not to over think it. I'm still young enough (43) that I can get away with this, but in another 8-10 years will need to be more defensive.

http://blogs.wsj.com/experts/2014/05/05 ... rinciples/

Books I like on the topic. I've only heard of John Bogle's investing books and have only read his book Enough, which isn't directly about investing. But based on what I know, pretty much anything he has written would be worthwhile:

The Intelligent Investor by Ben Graham (taught Buffett)
The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk by William Bernstein
The Way to Wealth by Ben Franklin (it's often forgotten that ol' Ben was also a businessman and retired at like 40, the science and political accomplishments mostly happened after this)

Bernstein also has a series of booklets on risk at Amazon @ about $5 a pop, I haven't read them but really liked the above book. One is on my "to get list."

Something I find fascinating but could see it not being for everyone, is you can get a copy of Buffett's letters to shareholders at Amazon for $2.99 for the kindle version from the 60s up through last year. It's huge, I've had it for months and am only up to the late 80s. You can also get them for free on the Berkshire site as pdfs if you don't want to read ALL of them. He distills a lot of Graham's philosophy in what I've read so far and I look forward to reading the letters when he stayed the course during the dot com boom and the aftermath and then again in the 2008-2011 range.

Full disclosure: I'm from NE originally and grew up when he was starting to really become famous. So I'm more predisposed to him than your normal person.

My own stuff is pretty much fire and forget, one retirement account is 70% S&P index and 30% a bond index. They other one is more of a mix with some small cap and international. I, currently, don't have access to index funds in that account. Supposedly, that will change this year and I'll change things up when/if it does.

I have most of my retirement in a low cost Schwab Total Market index. 0.04% cost, the lowest around, I think. Also, if you have an acct at Schwab, it is free to buy and sell. No commission.

I also have @ 35% in other ETFs and stocks because, uh, I like the gunslinger aspect. Some have been good. BBH, a basket of biotechs, has returned over 300% for me over the past few years. EOG (owns the best land in the Bakken) has done a %100 gain, as has Google. I've lost money in Japanese Hedged Equity, and trailed the market in Ford (got in late). Caterpillar killed me and AMJ, a basket of oil and gas pipeline master limited partnerships, has only done about 30% for me over five years, but it yields 4.5%. Simon Property Group (SPG), a REIT, has done 12.5% for me in 6 months and yields 3.3%.

Would I have done better in a simple total market index fund? Some years I crush it. But over the 20 years I've been tracking it, the index wins by about a percentage point. Damn it.

For the past few years, even as an older investor, I have been out of bonds.

Now if I'd done what most money managers suggest and moved my $$$ slowly over into bonds as I got older, I'd have lost money year after year. So my all equity acct does much better than a combo equity/bond portfolio. And I realized bonds kinda sucked a couple of years ago, because I pay attention to the market because I'm interested in how the gunslinger acct is doing. All in all, I think I'm doing fine and actually enjoy researching stocks and ETFs. I like to try to identify macro trends. (Like: I think Bio-tech will be this decade's big Pharma). If you don't like that kind of research, and speculation, the index is the way to go.

Freki wrote:The Intelligent Investor by Ben Graham (taught Buffett)

Does he tell you how to borrow money at the same rates as Buffett?

Pinky wrote:

Freki wrote:The Intelligent Investor by Ben Graham (taught Buffett)

Does he tell you how to borrow money at the same rates as Buffett?

LOL, no. Considering it was written in 1949, before Buffett was Buffett.

Diversification: gold for some catastrophic events, blue chips for growth, some venture capital shares as the gamble in case one of them becomes new Microsoft, and property, which is pretty cheap in the States right now I believe. With all this there is still no guarantee of security, and everyone would benefit preparing themselves mentally to the worst scenario.

seeahill wrote: Would I have done better in a simple total market index fund? Some years I crush it. But over the 20 years I've been tracking it, the index wins by about a percentage point. Damn it.

malkiel, a random walk down wall street, could have told you the index would win.

Smet wrote:Diversification: gold for some catastrophic events...

Ha!