NordicImpalers

Young Jeezy's 'The Recession': I Think We’ve Bottomed Out

Generally, I agree with the article-- the best statements belong to others: "... money is never made or lost – it is simply transferred from one perception to another" and, "Be greedy when others are fearful and fearful when others are greedy." The latter, is good a rule of thumb, and a mantra of the value investor, who if not careful can mistake a rational sell off for an irrational panic (Bear-Sterns). The market can ruin the experienced and the inexperienced alike, but generally rationality belongs to the experienced, and irrationality belongs to the inexperienced.

We usually remember and apply 'past performance does not guarantee future results' to stocks and funds, but the market itself is becoming less dependable for generating wealth in the long haul. Making judgments based on historical trends in the market has become, for me, as nonsensical as comparing statistical data of any sports franchise to its own past. Market trends are less reliable today because the world is increasingly dominated by western capitalists with a global vision. They move through the world with less and less allegiance to country. Governments are bought and sold (stability of the dollar is less and less concerning to the powerful wealthy). It takes less time to build a company's business and less time to erode it. I don't know that buying and holding works like it did in the past, but it has always been true that attempting to buy at the bottom and sell at the top is rarely possible. If that is what is meant by timing the market, then I agree, it should not be attempted. But buy and hold does not pay appropriate respect to the quotes.

So, remember the quotes, watch the P/E ratio, sector and economic growth, and stay diversified. Move incrementally in and and out of positions according to preset benchmarks, which are not necessarily automatic trades, but second guessed with high caution. As wealth increases, diversify outside the market (be sure to own some productive land).