investment advice

[DrPizza]

The person in charge of my 403b informed me that the market has ended up the last 4 years, and it's never ended up 5 years in a row. Therefore, their analysts predict that the next year will be a bad year, and that I should move a significant portion of what I have in stocks over to guaranteed interest, international, and bonds. Personally, I don't believe in looking at trends like that, rather than looking for specific reasons certain years were good and certain years were bad. Sounds like the gambler's fallacy to me.

Agree? Disagree?

 

[Vonkhan]

Agree (I work for a national financial publication + investment tools) and all our editorial staff has the same opinion

 

[Svnla]

All I can say is "past history is not an indication of future performance". No one on earth, even the legendary Peter Lynch/Warren Buffet can say for certainly that this will go up and that will go down.

You have 50/50 chance of right or wrong either way.

 

[DaveSimmons]

Following most stock-pickers has historically done worse than just holding index funds. So I just buy and hold index funds (US and international) and ignore advice like that.

The closest I come to market timing is in my non-retirement account, where I try to buy additional shares during dips in the market. Even that doesn't matter over time.

That's a buy-and-hold strategy. Active traders and stock-pickers will of course disagree.

 

[maddogchen]

I'm not expert but I think you should have a portion of your portfolio in international stocks and a portion in bonds anyway.

 

[kranky]

I agree - saying the market will go down because it has never risen 5 years in a row is simply lame. It may go down, but there will be underlying reasons - economic, political, climate-related, whatever.

If you are a long-term investor, don't try to time the market. It doesn't work.

 

[tw1164]

How close are you to retirement? If you're getting close to retirement maybe you should re-evaluate your risk level.

 

[Elbryn]

its impossible to predict whether the market is going to up or down. even more impossible to predict which asset is going to have a good year. if you're happy with your current asset allocation, rebalance to your splits and you'll be fine. you'll be naturally selling high on things that have done well this year and buying low on assets that havent.

 

[Yossarian]

Especially for a retirement account, short term performance is irrelevant. That includes individual years. You should have a diversified asset allocation, including domestic and international equity index funds and some bonds. Over time your allocation will have a much greater effect on your portfolio than short term market fluctuations. I recommend checking out books like The Bogleheads Guide to Investing and All About Asset Allocation, and reading www.diehards.org