SayAlt

Here's why I think you should care by way of easy example:

If your investment account were solely invested in the DOW index and you stayed invested through the sub-prime crisis of late '07 to early '09, it has taken you 7 years to recoup your losses. And that's WITH the Federal Reserve engaging in unprecedented never-been-done-before fiscal policy priming the pump via Quantitative Easing!

On the other hand, had you gone to cash in early '08 and waited just 1 year before buying back in, you would have doubled the size of your account.

In other words, recent history shows that going to cash for just one year (and giving up any potential return(s) in that 1 year) can save you 7 years of investment time. And I'm not even going into the loss of compounded growth in that 7 years, either. Just dealing with principal alone.

But hey I really could care less what anyone else chooses to do. By all means, ignore everything I've said because of a simple math error.

I'll just leave this here...





Remember, I have no idea what I'm talking about and wear tin foil hats...

higney85

Previous example assumes you timed all of your moves correctly by forecasting. That's not a realistic viewpoint.

It also assumes only the Dow, which is only 30 stocks. The S&P 500 covering roughly 500 stocks and all 10 sectors is a better reference of the US market.

Also, keep in mind that the US market DOES have a good bit of oversees business, but the issues are coming from commodities and international markets, casing a negative reaction in US indexes.

Just saying.

Al Czervik

Say alt- you're saying that if someone times the crash perfectly they'd be in better shape. I 119% agree with you. How many times would I have to get out/park my assets/wait it out/it didn't crash/re-invest at a lower position/etc to get lucky enough to time the crash perfectly?

Long term investment is your friend.

SayAlt

Not true. The example of Marriott I gave above demonstrated that timing of moves is not that difficult...

...when you know what you're doing, that is. And just like learning how to fly, anyone can learn how to do it.

Look, my point is simple.

RBS, Goldman, and a host of other investment pros are telling anyone who will listen to go to cash. Now. They were correct in 2008 when they last issued warnings as grave as they are today.

There are reams of excellent info as to why you should go to 100% cash that is available for anyone who chooses to look for it. Furthermore, RBS, Goldman, etc. are not in the business of giving bad advice, otherwise they'd be out of business pretty quick.

If you don't think the global and US markets aren't going into a major correction (or worse), for whatever reason, fine. I'm simply trying to warn anyone willing to listen that now is an excellent time to go to 100% cash and wait a year before jumping back in.

In the end, I really don't care. Just some free advice with demonstrable proof that I actually know what I'm talking about. I'm simply offering solid, experienced investment advice backed up by historical example and proof of my knowledge (if not my math skills).

Take it or ignore it. Either way I'm cool with that. Now you'll please excuse me...my tin foil hat needs adjusting.

minimwage4

Low oil prices will always keep downgrades and furloughs low.

NoSidNoStar

You might claim to know finances, but basic math was not your strong subject, was it? (A decline of 119% would have brought the DOW to negative 2,697.63, if that would be possible)

deltajuliet

SayAlt or anyone else, if you're interested in taking the time, would you mind explaining very generally why, when you and I spend as much as we always do on Starbucks and going out to eat and cell phones and whatever, the market still goes into recessions? I understand taking a hit on stock value, but why do companies suddenly lose money and people get laid off? There are obviously macroeconomic factors I'm not getting here, but I think of it bottom up when maybe I should be thinking top down. Nonetheless, if you're looking at it top down, a lot of the factors causing negative economic effects seem artificial, speculative, and intangible. Why does that make people lose jobs?

higney85

Timing is the key, but the least predictable piece possible. That's historically true. If it was easy, everyone would be doing it successfully.

daOldMan

Just go to Vegas and hit the black jack and craps tables.

higney85

That's a fundamentally stupid investment decision.