If you would have asked me a few years ago if there was risk investing in the stock market, I would have probably explained to you that there are many risks involved in investing but that time tends to diminish them. When "time in" the market can overcome the risks involved, it makes sense to buy an appropriate portfolio of investments and simply hold them for a long time. Even though the market is down over the last 10 years for the first time, I still believe that given enough time market risks are diminished. But how long is long enough to wait? Is the buy and hold strategy all but dead?
Over the next couple posts I want to explore this issue with you. There is no grand conclusion at the end. Without an in depth discussion of your specific goals, risk tolerance, and portfolio it would be very inappropriate for me to provide generalized investment advice. Instead, I hope to provide thought provoking issues for you to consider. Here are the topics I have in mind:
- What is an index?
- The growing importance of fixed income investments
When I have these discussions with my clients, it sometimes provokes controversy and I would be remiss if there was no reaction from my readers. I bring these issues to the forefront because I believe that we must examine the fundamentals of our investment strategies if we are to emerge from this "interesting" financial time stronger and wiser than we were when we entered it. I intend to guide the journey. The destination is up to you.
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