Lili..:

tar42:

As a retiree maintaining account value is my #1 objective. I can myself pare back some allocations in funds/stocks that may well be in for hard times.

This is why I am an income/dividend investor.  The value of my account can fall but as long as the dividends don't fall, I am OK.  If the dividends fall, I am in trouble.  But if interest rates rise, that helps out the cash portion of my portfolio.

Take care

Tim

I see where the DOW is at the low reached in September of 2006.

Consider that the DOW JONES IND was at 11,583 on January 4, 2000 and where the world economy 'appears' to be heading, I for one, am happy to have some control over my account.

Tim

tar42:

I see where the DOW is at the low reached in September of 2006.

Consider that the DOW JONES IND was at 11,583 on January 4, 2000 and where the world economy 'appears' to be heading, I for one, am happy to have some control over my account.

Tim

I am buying a dividend growth balanced fund today.  Not a lot, but some.

Lili..:

I am buying a dividend growth balanced fund today.  Not a lot, but some.

The banks and automakers, both traditionally value, dividend-paying sectors, have been cutting their dividends. Do you really think that companies, in general, will continue to pay strong dividends in this economy? Just a question.

Also, with interest rates expected to rise in the future to combat inflation, it is not surprising that active managers have so much cash. In other words, bonds will still fall in value if interest rates rise and if stocks continue to fall.

Dan

This is why I'm an index investor.  Studies have shown that active managers increase their cash positions *after* market declines and reduce it *after* runups.  This doesn't benefit the shareholder.

- Tom

tnlsea wrote the following post at 06-26-2008 2:17 PM: This is why I'm an index investor.  Studies have shown that active managers increase their cash positions *after* market declines and reduce it *after* runups. 

That's Boglish.  I agree.   Now would be the time to rebalance (i.e. REDUCE cash position and increase equity position).

was lucky to dump VAAPX and VWEHX in jan

I have had mostly cash 

here is last month stuff I reported to Ben's hand on:

Re: Handson, Tracking May30, 2008 Santa Cruz 05-31-2008, 1:58 PM | Post #2523299

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I'm sure the index investors that have or will respond to this thread will differ with 'some' active investors for the simple reason that they as index investors believe that one should be fully invested at all times in index funds regardless of economic conditions. Even the active investor that has years to go may be willing to continue to purchase shares in their funds rather than placing new money in the Money Mkt. As a retiree I play to caution when risking my money. Nothing wrong with those that is in the accummultion stage can put their $$$ in the MM rather than exposing it immediately to the markets. LOL,I heard the MM is still yelding something and is plus for the year.

Considering the historic record of the DOW over the past few years I would think there will be opportunites for those who hold off buying into this mkt.

Take care

Tim

Even as an active fund investor, I'd prefer if my managers were finding values right now, rather than going to cash.  Usually if you're comfortable with your managers going to cash, then it's actually a bad time for them to do so.  If you're going to go to cash it makes sense to do so before a market decline, not afterwards. 

What's more, most people can't time the market effectively-- it's simply too unpredictable.  That goes for the vast majority of mutual fund managers too, so attempting to go to cash is more likely to cause a drag on returns than anything else. 

Ideally that may be true, Nagorak, but I'm far from convinced that we are near a bottom. There is little good news globally that appears positive for the investor, so I see no hurry to allocate into equites. When the DOW receeded from the high of 14K to 13K many were stating it was a buying opportunity and where are we now. 11K and change.

Tim

tar42:

Ideally that may be true, Nagorak, but I&#