The S&P 500 500 index closed at a record high yesterday, and could do so again today. Back in June of 2004 I was telling readers about how to position their portfolios when stock prices rise well above trend. I told them then that they had two jobs in preparing for such lofty stock prices. I wrote: So what is your plan during periods when stock prices rise well above trend? You have two jobs. First, be sure your exposure to equities does not exceed what, for you, is a conservative and appropriate level. Second, place more emphasis than normal on dividends. Look to maximize yield. And by … [Read more...]

There’s a saying in finance that you shouldn’t fight the Fed. What that means generally, is that if the Fed is encouraging riskier or less risky behavior with its policies, you should go along. But what happens when the Fed is giving mixed policy signals? The Fed increased rates as recently as December 20, and was discussing further hikes even later. Now, in June markets see the Federal Open Market Committee signaling two possible rate cuts in 2019. That’s a neck snapping change of course. Such turnabouts aren’t new for the Fed though. Back in April 1995 I wrote: In recent testimony to … [Read more...]

Last week I explained that I don’t miss the boat because I’m always in the boat. The post was an outline of my long-time philosophy for remaining fully invested so as not to miss the best times of market performance. My avoidance of market timing isn’t simply intuitive. In fact, in December 1991 I detailed some of the research on which I based that philosophy. I wrote: Your Biggest Mistake in Investing Is to Market Time You don’t want a fund that is an active trader. Market timing does not work; it’s a fool’s game. Forbes presented one version of the case well in its issue of 28 October … [Read more...]

Market volatility is up, and any time that happens I get asked one question more frequently: “Is it time to sell it all and wait?” My answer is an emphatic no. Attempting to time the market by selling out and buying in is a great way to miss the best days and months of the market’s performance. Instead I recommended in May of 1991 that investors prepare ahead for market volatility by focusing on stocks with low betas. I wrote: In the stock market the words risk and volatility are synonymous. I want you to concentrate most of your efforts on stocks that are less volatile than average. What … [Read more...]

If you are looking for the best advice I can give anyone getting started in investing, you’ll need to travel back to November 1989. At the time, I was debriefing on the Blanchard’s NCMR New Orleans Investment Conference of that year, at which I had spoken. An attendee asked me a question, and my answer included the six most important words in investing. I wrote of the scene: THE MOST IMPORTANT WORDS IN INVESTING I’ve just returned from speaking at the biggest investment conference in the U.S. I now speak at only one national conference per year, and Blanchard’s NCMR annual extravaganza is … [Read more...]

Here’s what I told you, all the way back in February of 2015: stay fully invested. I wrote: Stay Fully Invested As I’ve written ad nauseam, I do not get in and out of the markets. I maintain my fixed income/equities balance, adjusting as time passes (fast) for my age. For an investor who is crafting a dividends/interest-oriented portfolio to pass along to heirs, I can live with a 75/25% equities/ fixed income mix. But where income and safety in retirement is the target, the reverse ratio is optimal—no second-guessing, no deviation from focus, and no market timing to be … [Read more...]

Throughout my years in the investment industry, the question most frequently asked by clients is probably “How are we doing?” In June 2015 I explained how I answer that question. I wrote: How Are We Doing? Throughout my first 28 years in the investment industry, I worked in the trenches, talking daily with clients and the financial media, as well as speaking at investment seminars around the world. All that changed in 1992, when I decided to move off the front lines and concentrate exclusively on research and writing, and Debbie and I moved to Key West, only 90 miles from Cuba. Hard to … [Read more...]

Making fewer, more focused decisions with your portfolio is a vastly superior strategy when compared to ill-considered rapid fire trading in and out of stocks. In July of 1997, I wrote about the benefits of a minimalist approach in life. The moral of the story being, the less you spin, the more you win. Here’s what I wrote then: MONK!... That’s it. Four letters say it all. Thelonious Sphere Monk died on 17 February 1982, over 15 years ago. Still today, when the name Monk comes up in Jazz circles, no explanation is needed. From his early days in the San Juan Hill West 60s section of New … [Read more...]