stock market

[74-911]

Anyone else (particularly anyone retired or near retirement) think this may be a good time to do some profit taking and move some money out of the market and into cash? Say go from 70/30 stocks/cash to 60/40 ? or ?

[on-ramp]

If you have a good profit, do it... and soon. who cares if the market continues to go up? what if it doesn't? A good profit they can never take away from you. knowing when to sell if just as important as when to buy. and the technicals show a correction is in order.

[TheMentat]

If you are retired, or near retirement and in good financial health, you would have a hard time finding a prudent financial planner that would advise you to be anywhere near 70/30, regardless of the current environment.

[p911dad]

The economy may be in an initial phase of acceleration upward, even though the last quarter showed a sluggish period(+1.3 %). It is possible the market has already started its next leg upward, with more canny investors already in. Once it is confirmed that the economy is in fact rising again, the market could bound upward sharply as those investors that waited for confirmation of a rising market re-enter the market(meaning you just missed the sweet part of the rise). You sometimes hear advice to sell into a rally when the price/earnings ratio begins to decline and corporate earnings increase, which sounds opposite of what should be, but is borne out by many years of market experience. This advice, of course, requires the intestinal fortitude that can absorb risk and still sleep at night, because it is contrary to the conservative advice of many financial counselors. However, safe investing will never make you rich, you will always be following, not leading, the curve.

[74-911]

Originally posted by gmeteer
The economy may be in an initial phase of acceleration upward, even though the last quarter showed a sluggish period(+1.3 %). It is possible the market has already started its next leg upward, with more canny investors already in. Once it is confirmed that the economy is in fact rising again, the market could bound upward sharply as those investors that waited for confirmation of a rising market re-enter the market(meaning you just missed the sweet part of the rise). You sometimes hear advice to sell into a rally when the price/earnings ratio begins to decline and corporate earnings increase, which sounds opposite of what should be, but is borne out by many years of market experience. This advice, of course, requires the intestinal fortitude that can absorb risk and still sleep at night, because it is contrary to the conservative advice of many financial counselors. However, safe investing will never make you rich, you will always be following, not leading, the curve.

We have had around 90% of our qualified (401K and IRA) plans in the market and about 70% of our other non plan investments in for over 25 years. When we retired 3 years ago we reduced the market exposure down to 70%. We both took major hits (on paper anyway ) in Oct. 87 and in the .com bust but kept the contributions going to the market and all has turned out very well.

What I'm trying to figure out is what you mention. Is this the beginning of a major rally as money re-enters the market or just a short rally which might be a good time to cash more out of the market down to maybe 60% exposure.. Everything I read says there is a lot of money sitting on the sidelines at the moment.

I saw first hand what rampant inflation does to fixed incomes back in the 70's and to get totally out of the market is asking for potentially very serious financial problems in the future. I don't think 60% exposure for someone 60 is much out of line but will definitely reduce the exposure further in future years

[p911dad]

Jack, I think that the guidelines for investment are just that-guidelines. Individuals have all sorts of varied degrees of skill, need and ability to handle risk. I think the 60 to 70% range is about right for me, because like you said, inflation will eat you alive and I think inflation is with us again. You need to keep the nestegg growing in relative terms too. I couldn't handle 90% and still sleep. Like you we took major hits in 87 and again in 2001, but still have done relatively well over the long pull. I remember watching the market collapse in both periods and actually had this disbelief that it was occuring! Ha!
I am an incurable bull and always look for positive signs, and I see them now. One is the recent increase in overall global liquidity and its positive relationship to stock prices. That is a clue of an upward trend beginning. So we'll see. Glenn

[tabs]

Daddy I'm nearly 90% in the market. I live or die by the sword.

The fact of life here is that the Market is going to be where the action is for the next 3 to 4 years. RE, Bonds and Commodities have all run their business cycle courses. The Market is still fairly priced to under priced. The DOW and SP500 have only reached a new high. A buy and hold strategy doesn't really maximize your profit during a Bull Run. One needs to pick solid companies and watch and trade their Trading Ranges. For that U need some volatility in the market. Now I am no fking expert on this stuff thats why I rely on Mother in Tucson.

Other than that Gemeter + 1

[Howard Agency]

I'm 65 and while my retirement portfolio is only about 1/3 of my net worth (rest is in real estate and business ownership) 85% of that portfolio is in stocks/mutual funds, the rest in cash/bonds.

After 40 years of investing, I'm still convinced that a diversified stock portfolio is the best way to go. Where's that sword?

[74-911]

gmeteer: Think we are on the same page

Originally posted by Howard Agency
I'm 65 and while my retirement portfolio is only about 1/3 of my net worth (rest is in real estate and business ownership) 85% of that portfolio is in stocks/mutual funds, the rest in cash/bonds.

After 40 years of investing, I'm still convinced that a diversified stock portfolio is the best way to go. Where's that sword?

I was in pretty much your position 4 years ago re: business and real estate ownership. In 2002, the writing was on the wall: the internet was killing our software business so when one of our competitors made an acceptable offer we sold. We just sold our office building in Feb. so am now out of business and real estate. Interesting how quickly things can change and none of it particularly planned. I have had discussions with several friends who insist they will work til they are ?? that sometimes the best laid plans of mice men....

Definitely agree a diversified portfolio is the way to go but think I will sleep better with a bit less exposure. Besides that, I think tabs has cornered all the swords...

Jack

[Porsche-O-Phile]

I'm staying in stocks, mutuals, options and futures. I may consider re-tooling my portfolio though to be even more heavily vested in foreign markets. I see these types of investments as the only viable tool for real wealth-building right now, so I've no plans to get out. Lord knows RE is a complete turd right now (and probably will be for several more years). It's toxic.

[74-911]

Originally posted by Porsche-O-Phile
I'm staying in stocks, mutuals, options and futures. I may consider re-tooling my portfolio though to be even more heavily vested in foreign markets. I see these types of investments as the only viable tool for real wealth-building right now, so I've no plans to get out. Lord knows RE is a complete turd right now (and probably will be for several more years). It's toxic.

There is a time for building wealth and a time for holding on to what you've built, the perspective changes as you get older. It really changes when you no longer have any earned income.

[JeremyD]

We are starting to take off again - usually we (the business) are the indicator for growth in the economy - so right at this point in time - I'd (and I have) left considerable money in the market. Past nine months have been a little brutal...

Oh - and a revised .6% growth in the first Q 2007.

[on2wheels52]

Most of mine is still in the market, am going to ball the jack at least another five years. Kid should be about done with college then and will re-evluate my stradegy.
Jim