Well, I've been fully invested in the stock market for 11 years, I've used a paid advisor for most of the time and I have yet to make a return on my investments. I've been up at times but mostly down over the past 10 years. Now, I'm reading they're talking about another lost decade going forward? So, I've taken a more proactive approach to investing and switched to predominantly bond funds. The life of the bond funds collectively have been over 8 percent over the last ten years. The stock market over the last then years has been 0%. To all of the people that say "stay the course" and "buy, buy, buy" I have to say, go back to your investment jobs and stop trying to give bad advice. If I had invested in bonds early on I'd have more than doubled what I have in my current portfolio. But, you'll still hear people say, stay in the stock market up to 20 % of your take home pay... I can't help but think I've been a fool all along!
There is more than enough hype surrounding the market lately, so why not see what the readers here think. Since the market has had a rough couple weeks, what changes are you making, if any? Personally, I already have a diversified portfolio that I’m comfortable with, so I’m not really making any changes.
A good mix of stocks and bonds for me means I may not see the highest of the highs, but I also won’t see the lowest of the lows. I’m satisfied with taking some of the volatility out while I continue to invest the same amount regularly. Aside from a few individual stock holding changes, why get bent out of shape when the market gives back some of the gains that it has been so generous with over the past few years?
That’s just me, but I’m curious to see what others are doing in response.
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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.
Like everyone has already said this is a great buying opportunity. But I don't think now is the time to through everything in. I'm putting some in now and waiting to see what the markets next move is.
I just glad this week is my wife's pay week. Her 457 is a lot heavier in equities than my plans, so we should be getting some good prices this time around.
I actually made all the changes I was going to make before the correction happened. I cut back on stocks that had gotten overextended and I removed some stocks whose underlying businesses were too close to the subprime mortgage and CDO mess. It looked incredibly foolish doing that at the time when the market was rallying like crazy, but it looks like the right thing to do now.
I'm going with buy and hold, and I'm glad to see most of your other voters agree. Over in the UK we're just as worried about the direction the markets are taking as you are in the US. But it's essential we keep our nerve, or things will just get worse. So fingers crossed and I'm trying not to lose too much sleep over the shrinking value of my pension plans.
At first I was a little nervous with my allocation, but I made some minor adjustments and will be looking to buy much more in the near future!
If I didn't read personal finance blogs I wouldn't have realised that the US stockmarket was falling and I am far too lazy to change a perfectly good automatic investment system.