Investing Expert Voices Today

Example 671 of Why to Think Long Term

It isn't often I get a chance to impress a bunch of 20 year-olds, otherwise known as my kids, but it happened yesterday. We are down in Florida on vacation, and over breakfast--well brunch; they don't get up early--I said with absolutely confidence that I could predict how the stock market would do for the day.I promised it would drop. How did I know? I didn't of course. But I did read a story in Wednesday's Wall Street Journal about how stocks were up 20% from their November lows. The story went on to hint that maybe the carnage on Wall Street was over. Any time a media person says "A," think "Z" and so I predicted the down day and I was correct. The Dow fell 2.7% The point: Ignore day to day gyrations in the market. More…

The Hybrid Car Theory of Investing

I am a late adapter. For example, I only just started using my cell phone for just about all my calls, so it is probably not surprising that I haven't ever driven a hybrid car until now. But, I rented one this week--I didn't seek it out; it is all that the people at Hertz had--and I love it. Yes, sure, I like the fact that I am helping to save the environment, but the appeal to an old cheapskate me is the gas mileage. I am getting about 50 miles to the gallon. What has this to do with investing? A lot. More…

The 90%-10% rule

Because I have the world's most annoying accountant--the man has absolutely no sense of humor about meeting deadlines and filing accurately; he is in favor of both--I have already started getting my papers together to help prepare my 2008 tax returns. Here is something I have noticed in going through my files. I divided by savings/investings into two buckets: Some 90% went to my retirement. The rest to things like my emergency fund and general savings. I didn't consciously plan it this way, but I think it is a good way to go. Like you, I am not getting any younger. (I am 54.) And like you, I saw my retirement accounts get hammered last year. (Even with making contributions, I was down 30% year to year.) So, my retirement accounts are a priority. More…

One New Year’s Resolution

For most Americans the New Year really starts today. Everyone is done visiting for the holidays and is returning to work or school. I am a not a big believer in resolutions, but here is one I plan to keep. I will continue to save aggressively for retirement. Yep, 2008 on Wall Street was a disaster. The Dow was down 33.8%. The S&P fell 38.5% and the NASDAQ was even worse—off 40.5%. Even with that dismal performance, over then last 85 years or so, stocks have outperformed every other investment there is. If you want to have enough money to retire the way you want, you have to keep investing in stocks. I plan to. I hope you will too. And, of by the way, “Happy New Year.” More…

Full disclosure all the time, please

"Analysts suspect GE's Jeffrey Immelt may announce at his annual state-of-the-company address a decision to stop offering quarterly earnings forecasts," the Wall Street Journal reports this morning. I hope that is not the case. Yes, I believe in investing for the long-term. And yes, I believe that the pressure of having to hit Wall Street's expectations can make companies focus more on the short-term than they should. But the quarterly announcements: a) let investors (like us) know every three months where the company stands; and b) imposes a real discipline on firms. More…

A Bad Idea -- Understandable Though It May Be

Bank of America is currently running ads that on the surface sound appealing. They are offering to let you put your retirement savings in things that are guaranteed. Given the recently performance in the market, who wouldn’t want that? The answer should be: You. Guaranteed investments are the not the way to go, if you are saving for a long-time goal (like retirement.) The returns on such things as money market funds, and certificates of deposits, even if they are guaranteed may not be enough to keep up with inflation, let alone produce the long-term growth that you need. More…

A Definition of Insanity

The Dow industrials declined nearly five percent on Friday. Blue chips have lost 929 points--or 9.7 percent--in two sessions. That's the biggest two day drop since the crash in October 1987, and according to the Wall Street Journal the largest two-day point loss ever.  The reason for the decline? The market is getting continuing confirmation of all the bad news it was expecting. Yesterday's bad news: Slower retail sales as consumers cut back. The market reaction makes no sense to me. The market fell off a cliff last month, on the expectation of bad news. Now, it falls even further, when it gets the news it was expecting. Sigh. The only thing to do is hold on until the so-called investment professionals come to their senses. More…

Vote

The cliche "if you didn't vote, you can't complain" isn't completely right. This is America. You can complain about just about anything at any time. But you will have a whole lot more credibility, if you voted. Please do. More…

No Fair Peeking (at your 401K)

The Dow climbed just about 11 percent yesterday, in anticipation that The Fed will cut interest rates again. I did NOT check the value of my retirement accounts last night. To quote one of our great philosophers (Dr. Seuss from Horton Hatches the Egg): "I meant what I said, and I said what I meant. (An elephant's faithful, one hundred percent.)" I said I wasn't going to check the value of the accounts to the end of the year, given the market meltdown. And one good day is not going to change that. If you are happy with the way your reitrement accounts are allocated, I still believe this is the best strategy. More…

Which Side of the Economic Debate are You On?

It isn’t often that I have a direct connection to the news (other than reporting it.) Yesterday was an exception. While sitting on a plane, I had the chance to read about two of my former employers who are caught up in the economic downturn. One is a hopeful story, at least as far as the economy is concern. The other is not. Let’s begin with the bad news. “The Star-Ledger of Newark plans 40% cut” read one headline outlining, in matter of fact fashion that the largest newspaper in N.J.—and the place that had given me first job—had fallen on hard times and four of 10 people were being let go. More…