The most important investment tool in the current market environment is a process or model to assess risk. Investment timing rules are not perfect, but are critical in today's markets.
They provide you with an objective and unemotional way to assess the upside potential or downside risk of the markets. As I said, they are not perfect, but they are a must in a market swinging more than 2% in either direction in a single day.
I use them, and quite frankly I found them useful. They help me navigating today's environment. Long-term investing has failed as a long-term strategy with the market at the same levels as May 2002 and February 1998.
Do you remember when Bogle, the former chairman of Vanguard, was selling the idea of index funds? In the last 10 years you would have achieved 0% return. You could have done much better by keeping your money in money market funds.
This is the reason investors should use timing models. If they are too complicated for you, then you should seriously think buying only Treasury bonds from the government (www.treasurydirect.gov) (not bond mutual funds).
More, much more when you subscribe to The Peter Dag Portfolio by going to https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
1 comment:
Do we have a retest of the lows coming?
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