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Global political and economic events influence financial markets over the long term. The downturn of March 2009 should convince everyone that professional money managers cannot do the job for you. You have to stay informed of key events and have a significant role in the management of your... More
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  • The "experts" got it so wrong......again! 0 comments
    Oct 31, 2011 11:39 PM

    "Experts" have been recommending stocks and asking to avoid bonds.  Take your pick of the expert, and there he/she was asking to stay away from the bond market.  Reason?  They were convinced that due to the magic of the fed and Ben Bernanke, inflation was around the corner and yields would spike, creating a bear market of bonds.  We all soon have the "good" problems of the developing world of too much growth and fed will be raising interest rates.  How many times have we heard that in the last 3 years? 

    And then this article today where there is a listing of whose who of people wrong on their predictions of the demise of treasuries.  Jeremy Siegel, a finance professor at the University of Pennsylvania’s Wharton School in Philadelphia, said "stocks had risen more than bonds over every 30-year period from 1861 until now".  Wow! what about his previous comments one year ago in this article:  "Anyone that has money in bond funds has to be very cautious" of losses in both the short and long term.  What was a person who followed Siegel's advise retired in 2008 supposed to do?  That person would not have any money in CD's today and he would have missed the golden opportunity to lock in his/her money at an FDIC guaranteed 6% return!

    As I have been writing for several years, park a portion of your hard earned money in CD ladders, which I believe is actually a better strategy than mutual funds dealing in treasury bonds.  The returns are higher and risks are lowest.  A portion goes into precious metals and mining stocks and only then the riskiest part of the portfolio goes into general stocks and real estate.

    One must be very careful of expert advice.  It is best to have a strategy of your investments that you yourself understand. 

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Own CD's, precious metal mutual funds

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