Observations on life

What to do now with your money

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Humble Dollar

By the market close on Dec. 24, the S&P 500 stocks were down 20% from their September high, putting them at 18 times trailing 12-month reported earnings. For anyone with a contrarian bent and cash to invest, it seemed the market was presenting a wonderful holiday gift. But that gift was quickly snatched away: Three trading days later, the S&P 500 had bounced back 6% and valuations are a tad less appealing.

What to do? We all have different financial situations and are at different stages in our lives, and that will drive how we react. Here’s what I’ve been doing—and plan to do.

3 replies »

  1. “Past Performance Is No Guarantee of Future Results”… now more than ever, it’s time to be careful.

    The Federal Reserve monetary policy of pumping liquidity into the economy and low interest rates for the last decade is what the prime mover was in juicing the stock market. Things are changing.

    A conservative rule of thumb for investing in the stock market is to subtract your age from 100 and use that as your target for percent of assets in stocks.

    Stocks and bonds don’t always move inversely. Sometimes they fall in value together. There are times when cash is King.

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  2. .

    My old computer can’t access that website. But those who are older and retired should keep their nest egg safe because there may not be time to recoup from a down market.

    .

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