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Sorta funny MJ, you have been giving advice for quite some time over and over and aren't you a non professional? Many have liked your non professional advice and you have even been recognized for it.
I'm trying but I also try to improve by listening to others. Yes I only invest for myself.
Folks one of the biggest challenges is IMO that we have two alternating investment environments and they require a different investment approach. It is also difficult to impossible to know when one ends and the other one starts. This is just my idea.
a) Stock bull market and economic expansion. Commodities stable to down in real terms. Economic expansion lags.
b) Commodity boom and economic misery. Stock market bear with high volatility.
In environment a) you win by simply buy-and-hold the total stock market through all ups and downs. In environment b) you win with a tactical asset allocation model a la Mebane Faber. But how to know when to switch?
blindly buying funds whether index or otherwise can be a recipe for failure if the mix is not within your tolerance of pain in a downturn or if it does not match your goals and time frames..
Quote:
Originally Posted by mathjak107
whatever works for you. it isn't their picks are so good. it is the discipline of letting them call the shots that makes it work for me.i always think i can do better and i know me. i would try to time,tinker and always think about my next move.
Sorta funny MJ, you have been giving advice for quite some time over and over and aren't you a non professional? Many have liked your non professional advice and you have even been recognized for it.
i don't give personal advice as many here who contacted me can tell you. i only talk in terms of studies or what i have done . all of that is thrown out for the public as a group and for those who have an interest . but i would never tell someone what they should do with their money especially if they have no knowledge..
i have told folks many times at least if you have no knowledge try a newsletter to guide you and to call the allocations and moves that best suit you.
blindly telling folks to just buy funds ,any funds is really not doing them much good and may be harming them by sending them off in to the wild with little clue as to what they own , why they own it and when to own it.
Folks one of the biggest challenges is IMO that we have two alternating investment environments and they require a different investment approach. It is also difficult to impossible to know when one ends and the other one starts. This is just my idea.
a) Stock bull market and economic expansion. Commodities stable to down in real terms. Economic expansion lags.
b) Commodity boom and economic misery. Stock market bear with high volatility.
In environment a) you win by simply buy-and-hold the total stock market through all ups and downs. In environment b) you win with a tactical asset allocation model a la Mebane Faber. But how to know when to switch?
A long tern buy and hold method doesn't involve switching over. You hold it simple as that.
That would have been fine for the last 40 years ,especially if you held bonds. But that may be the wrong thing to do once the big picture changes and after 40 years rates go the other way and hurt you instead of adding to the pie.
portfolios may need nudging and tuning going forward. that is something they never needed prior.
i can tell you first hand most of our 401k participants were clueless about what they owned and target fund or not bailed in 2008-2009 and lost money because they were to aggressively invested because they were told to do so because they were young . many never came back.
they had no idea how volatile what they owned really was . nor were they diversified at all.
folks who have an understanding of how investments work have this distorted view that others do too. nothing could be farther from the truth. more harm has been done telling those folks what to do on the fly than had they done nothing.
nothing is ever a problem until it becomes a problem .
i don't think folks would attempt to give medical advice or legal advice without knowing a persons complete story yet they do it all the time with amatuer financial advice.
So, in other words, the advice doesn't work if you don't follow it.
Not the same thing as saying it is rarely good advice!
almost correct. "the advice doesn't work if they CAN'T follow it ,because it is not the best advice for that person or that person's pucker factor or level of understanding"
giving someone a portfolio of index funds to buy would be poor advice if that person unknown to you has shorter term needs for the money or obligations on the horizon.
it would be poor advice if that portfolio is overly aggressive for them and they can't stay the course because you know nothing about their investing temperment.
as i always say ,anytime you get a simple answer to a complex question odds are it is the wrong answer.
almost correct. "the advice doesn't work if they CAN'T follow it ,because it is not the best advice for that person or that person's pucker factor or level of understanding"
giving someone a portfolio of index funds to buy would be poor advice if that person unknown to you has shorter term needs for the money or obligations on the horizon.
it would be poor advice if that portfolio is overly aggressive for them and they can't stay the course because you know nothing about their investing temperment.
as i always say ,anytime you get a simple answer to a complex question odds are it is the wrong answer.
Yes, but I think you need to admit that your claim that it is "correct for almost no one" was hyperbolic, to the extent that yes, some do have shorter term needs for the money, but many do not since they have separate (liquid) savings set aside for those needs.
I understand that many out there generalize too hastily; but you should avoid overcorrecting for it.
Too many negatives (This isn't necessaily so, that isn't necessarily so, that other one isn't necessarily true either) isn't helpful. You need some positives too (Often this can work under X situation, many people have done well using Y, but be sure Z is so before you do it, etc.)
without knowing a thing about the person you are telling this to it would be a poor assumption that it is correct for them.
it can be correct advice for a lot of people but i think it is a whole lot better finding out first if you have the right person for the advice.
there is nothing wrong giving general advice not directed at any one person. but i think it is wrong to give advice to someone on a one to one basis when we know so little about them ,their needs ,goals and understanding..
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