Thursday, December 29, 2011

Investment wisdom

I can't tell you what investments will do great this coming year, but here are a few things I'm fairly confident of:
  • I don't care what "worked" this past year, or any other year; I only care about what will work going forward.
  • Past performance does not guarantee future performance.
  • Things work, until they stop working.
  • Things are hot, until they're not.
  • Jumping around (e.g., through "timing") can work well if you have the right combination of skill and luck, but usually is the surest way to increase your losses, even in a bull market.
  • "Steady and sure" and "stay the course" generally work, over time but not necessarily in any given year or two or three, if you pick solid investments, but "holding" is doomed to fail if you pick the "wrong" investments or if the overall market is down.
My retirement investments are down for the year (so far), by a few percent. I'll be making my 2011 retirement contributions sometime over the next four months (as soon as my taxes are done.) Unless I come up with some brilliant insight/discovery, I'll continue to buy a retirement target date fund, such as the Fidelity Freedom Fund that I currently have (and lost money on this year.) I currently have another 12 or so years until retirement.

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