By 2 Cents on October 7th, 2011 | Category: Planning |  No one knows what they’ll do in a moment of crisis and hypothetical questions get hypothetical answers.
~Joan Baez
When I wrote Another Bear Market: Is It Time to Buy? earlier this week, I tried to summarize the current bull and bear points of view. I also promised to write about how we’re approaching the current market volatility. As I mentioned, I think everyone can and should have a unique response – including the possibility of having none at all – to the market’s gyrations. Our response, therefore, should not be taken as advice on what anyone else should do. It’s based on our personal situation and if that was different, my strategy would be different too.
Background
For those who aren’t regular readers, I’ll just give a quick bit of background on where we’re at financially [...]
Read on and enjoy … Personal Finance in a Secular Bear Market
By 2 Cents on October 5th, 2011 | Category: Investing |  Every exit is an entrance somewhere else.
~Tom Stoppard
So the markets have really taken it on the chin lately. I read a blog post via Twitter a week ago that said it was a great time to be greedy. It was widely retweeted by many in the personal finance blogosphere. It’s just the kind of confirmation they wanted to hear, but that advice hasn’t worked out too well – at least for now.
I’ve seen plenty of folks chomping at the bit to buy more stocks as prices plummet. Those dividend yields get a lot juicier as the price of the underlying stocks drop! Of course, there’s also room for them to get even more attractive, or to be cut if the economy continues to sputter.
Given the tremendous diversity of opinions out there, I thought it might be a good time to do another Bulls [...]
Read on and enjoy … Another Bear Market: Is It Time to Buy?
By 2 Cents on July 27th, 2011 | Category: Investing |  If I had a formula for bypassing trouble, I would not pass it round. Trouble creates a capacity to handle it. I don’t embrace trouble; that’s as bad as treating it as an enemy. But I do say meet it as a friend, for you’ll see a lot of it and had better be on speaking terms with it.
~Oliver Wendell Holmes
When I wrote about Why This Is No Market for Couch Potatoes, it sounded like I was saying that there’s elevated risk in both the stock and bond markets at this moment in history. I was. That begs the question then: Where can we invest? If not stocks or bonds, where? Gold? Real estate?
An astute reader posed that exact question and I said I would address it in a future article. So here we go. I [...]
Read on and enjoy … Portfolio Options for a Risky Market
By 2 Cents on July 21st, 2011 | Category: Investing |  The conventional view serves to protect us from the painful job of thinking.
~J.K. Galbraith
A recent article in the Globe and Mail delivered the following advice to investors: Don’t Let a Fear of Bonds Infect Your Healthy Portfolio. The implications are clear:
1. Concerns about ultra-low interest rates eventually turning higher are overblown.
2. If you succumb to the paranoid people who think interest rates can actually rise above 0% – 3%, your portfolio will be unhealthy, damaged, infected. (The image with the article showed people in protective masks.)
3. And my personal favourite: Long term investors need not concern themselves with shorter term market movements because markets always rise over the long term – whenever that is.
So there you go. “Stop worrying so much about bonds.” All you have to do is put your desired allocation in bond mutual funds or [...]
Read on and enjoy … Yes, You Can Live Without Bonds
By 2 Cents on July 18th, 2011 | Category: Investing |  Never accept the proposition that just because a solution satisfies a problem, that it must be the only solution.
~Raymond E. Feist
Update: This article was featured in the Totally Money Carnival at Family Money Values. Thanks!
A recent article in Money Sense magazine offered some data on investment returns for the publication’s preferred investment indexing method: the Global Couch Potato portfolio. It’s a simple, low-cost way to invest in a set allocation of stocks and bonds with limited effort on the part of investors. The rise of ETFs over the past decade has turned this strategy from a questionable alternative to mutual funds to a near standard in the DIY investment space. Many personal finance and investing sites promote it as the best way for individual investors to manage their portfolios.
The strategy grew out of a desire to circumvent the [...]
Read on and enjoy … Why This Is No Market for Couch Potatoes
By 2 Cents on June 21st, 2011 | Category: Investing |  Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. Teach a man to create an artificial shortage of fish and he will eat steak.
~Jay Leno
Today’s quote illustrates why it’s so hard to invest in markets. There are so many variables, and some of them may not even be apparent to us. You could become the best fisherman on the planet and still lose money if someone successfully manipulates the market for your catch.
A little more than a year ago, I wrote a two-part piece answering 8 questions posed by Kevin at Out of Your Rut. He was interested in finding out where his readers thought the stock market was headed. I gave some pretty detailed answers to his questions and, while I think I got a lot of [...]
Read on and enjoy … What’s Next for the Markets?
By 2 Cents on June 10th, 2010 | Category: Investing | Many a man curses the rain that falls upon his head, and knows not that it brings abundance to drive away the hunger.
~ Saint Basil
Update: This post was included in the Carnival of Financial Planning – Edition #146. Thank you!
Today we’ll try to answer the last four questions posed by Kevin at Out of Your Rut in his article on where the stock market is headed. (You can read my answers to the first four questions in Part I.) Before we get started, I just want to mention that there has been quite a bit of bearish commentary lately, and it’s not just coming from yours truly, David Rosenberg, and other recently bearish analysts. If you don’t follow me on twitter @BalanceJunkie, here are just a couple of articles that caught my eye [...]
Read on and enjoy … Where Is the Stock Market Headed Next? Part II
By 2 Cents on June 8th, 2010 | Category: Investing | Weather is a great metaphor for life – sometimes it’s good, sometimes it’s bad and there’s nothing much you can do about it but carry an umbrella.
~ Terri Guillemets
A couple of weeks ago Kevin at Out of Your Rut asked a question that a lot of people ask themselves and others pretty regularly: Where Do YOU Think the Stock Market Is Headed? He presented both the optimist’s view and the pessimist’s, then challenged readers to answer a series of questions to arrive at their own view of where the stock market might be headed next.
I know there are some who would disagree with the idea of even raising the question. I’ve written a couple of articles about the ostrich effect and the other pitfalls of passive investing recently, so I won’t go into those issues again here. Suffice it to [...]
Read on and enjoy … Where Is the Stock Market Headed Next? Part I
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