Five ‘Lazy Portfolio’ strategies for a meltdown
Action tips before waving good-bye to this five-year-old ‘aging bull’
By Paul B. Farrell, MarketWatch
Some good ideas but some advice that makes me nervous about the “good” parts.
Cash out (but only if you’re super-savvy) – This sounds like a good conservative strategy so why do you need to be super-savvy.
We’re our own worst enemy, and we’re sinking deeper as Washington borrows $1 trillion every year to finance our out-of-control spending.
… And yet, back in early 2000, sky-high P/Es screamed “sell!” So Paul Erdman, a savvy MarketWatch economist, dumped stocks. But few listened. His fixed-incomes returned roughly 10% annually during the 30-month bear market, while the S&P 500 crashed and the market lost trillions.
Are P/Es sky high? Yes. Dump stocks? Probably a good idea. This is super-savvy?
Moving right along here, we come to sit tight and do nothing, or buy, buy, buy. Why?
Even if I got out in time, I probably wouldn’t be able to correctly time getting back in!” Warning: market timing is dangerous.
There is that evil “T” word again. Timing assumes that there is selling and buying, which assumes that you are going to want to own stock in the future after all this mess shakes out.
So, your options are buy, buy, or buy. You don’t want to miss out on all those bargains.
The set up seems accurate – we are at the edge of a financial and economic cliff. It can’t go on. Even “lazy” folks should be doing something. There is going to be a market meltdown (their word) which could be a really big, life-altering event. And these guys are advocating going shopping. And you wonder how we got into this mess. Sigh.