AMFs have no proven record of preserving capital in bear markets, and in fact that is not their job I believe I said: actively managed funds allow the manager to spot opportunities and position their fund for the rebound
I don't think I can beat professional managers or index returns, because due to the hard work of professional managers almost all stocks are very close to fair value. I believe I said: actively managed funds allow the manager to spot opportunities and position their fund for the rebound. Indexs will never spot opportunities, they go with the flow. hence any dogs will lower the ave..
That's why I believe it's most rational to invest in index funds (low cost, diversification) or individual stocks that I plan to hold for the long term (even lower cost, chance of windfall profits). Index- Lower expense, yes. Individual stocks, more risk IMHO. I guess I'm just happy with my selections and returns.
I'm still young, so I'm investing relatively small amounts of money that I could afford to lose. There's no way around risk in the stock market - it's always there, and it could always wipe you out. Surprising on the age thing.. I'm not young or ancient, I too would like 20% returns in a safe investment. I use the market for that, and try to control the ave risk.
so the only reason to hold out of the market is if you need money in the short-term. In that case, you're better off increasing your allocation to Treasuries/short term bonds/MM/cash rather than relying on mutual fund managers to preserve your capital and yourself to not sell at a poor time. Disagree here, I take losses to reduce my taxes. This is a a very nice way to dump any dogs I may have picked up and decrease the tax gains that I'll have at the end of the yr. Also, I just use mm/cash as a cash flow management. emergency $ are always invested in funds. Every yr an emergency doesn't happen my capital grows.
