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Put it in index funds. If possible, put it in tax-advantaged accounts.

by ihsw 5y ago

SavantIdiot 5y ago
This is the only correct answer. The only strategy that works though tough times is diversification and holding. With low-cost ETFs and municipal funds that pay tax free dividends, there is enough to be safe and smart. People recommending bonds, gold, penny stocks, and now crypto are the same armchair investors I've been hearing squwak useless tips from the sidelines for almost four decade.
- omilu 5y ago
  So selling stocks in order to have more cash in anticipation of a market correction is the wrong strategy??
  - omalleyt 5y ago
    You don’t want cash during inflation. You want hard assets. Precious metals and real estate.
  - Jommi 5y ago
    When do you know that the market correction has happened?
  - SavantIdiot 5y ago
    > in anticipation of a market correction is the wrong strategy You still don't quite get it: you're playing the market with this statement. Unless you're a "Big Swinging Dick" (the Salomon Brother's term in Liar's Poker for people that did a million or more a day, which is peanuts today) or on the NYSE trade-floor it ain't gonna happen. The vast majority of people I've known who believed this failed to anticipate and should have just held. But don't let me stop you, go right ahead and gamble away.
  - throw0101a 5y ago
    Sitting on the sidelines is a good way to lose money: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... The (US) market goes up around 70% of the time, so by being in cash you're missing a rising tide. Every day/week/month/quarter you're not in the market is a time period that you'll have to Buy High/er (instead of Buy Low/er) eventually compared to jumping in and staying in earlier. If you want, you can perhaps hold 20% bonds to (a) reduce volatility and (b) have something you can liquidate generate cash to Buy Low on the dip.

Put it in index funds. If possible, put it in tax-advantaged accounts.

by ihsw 5y ago

Put it in index funds. If possible, put it in tax-advantaged accounts.

This is the only correct answer. The only strategy that works though tough times is diversification and holding. With low-cost ETFs and municipal funds that pay tax free dividends, there is enough to be safe and smart. People recommending bonds, gold, penny stocks, and now crypto are the same armchair investors I've been hearing squwak useless tips from the sidelines for almost four decade.

omilu 5y ago
So selling stocks in order to have more cash in anticipation of a market correction is the wrong strategy??
- omalleyt 5y ago
  You don’t want cash during inflation. You want hard assets. Precious metals and real estate.
- Jommi 5y ago
  When do you know that the market correction has happened?
- SavantIdiot 5y ago
  > in anticipation of a market correction is the wrong strategy You still don't quite get it: you're playing the market with this statement. Unless you're a "Big Swinging Dick" (the Salomon Brother's term in Liar's Poker for people that did a million or more a day, which is peanuts today) or on the NYSE trade-floor it ain't gonna happen. The vast majority of people I've known who believed this failed to anticipate and should have just held. But don't let me stop you, go right ahead and gamble away.
- throw0101a 5y ago
  Sitting on the sidelines is a good way to lose money: * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... The (US) market goes up around 70% of the time, so by being in cash you're missing a rising tide. Every day/week/month/quarter you're not in the market is a time period that you'll have to Buy High/er (instead of Buy Low/er) eventually compared to jumping in and staying in earlier. If you want, you can perhaps hold 20% bonds to (a) reduce volatility and (b) have something you can liquidate generate cash to Buy Low on the dip.