TOM'S MAKING MONEY MOVES Find out what Tom is doing next. A new mutual fund. An old favorite. Where he's been loading up. What he dumped. How he's navigating all this volatility.
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HOUR 1
Comments
Questioning Your Decision to Sell
No disrespect professor. But wouldn't you have been better off just holding your mutual funds instead of selling them to their minimums? Timing the market doesn't work - not even for the professor. When you first started talking about trimming your positions a few months ago, the S&P 500 had just crossed 3,000. Now it's at nearly 3,600, and may be on the way to 4,000 given low interest rates, positive vaccine news, and so much pent up demand for goods and services in 2021. There's no guarantee that there will be a major correction that brings us back to the 3,000 level. You're sitting on 60%+ cash during a period in which the S&P has risen from 3,000 to 3,550 (18% return). Some of your listeners may have taken your advice and liquidated their positions to the minimum at S&P 3,000, and they may be regretting it. As someone that's setting an example for less experienced investors, shouldn't you be advising them to buy shares of reputable index funds or ETFs on a regular basis, and to never sell those positions until they need the cash, presumably for retirement? It's boring advice, but it works. Timing the market, and thereby selling positions with the expectation that you can buy them back later at a lower price, often doesn't work, and certainly hasn't worked for you as an outside observer.
Nope
I don't regret it for a minute. I not only said to sell to the minimums. I said to slowly dollar cost average back in. To hold onto stocks that pay good dividends. To boost the amount of precious metals in your portfolio to a maximum of 10%.
The current gains are temporary at best. I don't believe they will hold once LA is locked down for the holiday selling season. New York banning all dining definitely won't help. The spike in COVID we will get from the morons traveling for Thanksgiving won't help either. Deaths for Christmas followed by more morons traveling followed by more deaths. This is a grim outlook.
Warren Buffett buying gold should tell you something. The stock market is at nosebleed levels not based on the actual economy. It's working just fine for me because my portfolio is holding the line and will continue to hold the line when bad things happen. And they WILL happen. LA restaurants and bars are shutting down completely effective 11/25. New York nightlife is shutting down too. This will put thousands out of work. If you believe that will mean still higher stock prices, have a party! I'm remaining conservative for now.
This story from Business Insider bears out everything I'm saying.
This one from Barrons too: The Virus Is Surging. Growth Is Slowing. And Millions Are About to Lose Jobless Benefits.
tom
Thank you Tom
This is great advice and I made some adjustments after listening to this episode . I look forward to this advice from you . I purchased some AT&T stock, not much but it’s a start . In your opinion is purchasing some Iron Mountain and AT&T stock now and dollar cost averaging a good idea ? Or is it better to invest in a mutual fund ? Thank you !
More Discussion
JohnInLA asked the exact question that I was thinking too. I think the thing that get's lost in the conversation is what is your age? I can understand Tom's decision and portfolio changes at his age and with his investment knowledge. Yet someone in there 20's or 30's might not benefit from the same strategy. Continuing to invest during both up and down times in good mutual funds over the coarse of the next 30 years would probably exceed a market timing strategy regardless of pandemic or not. Like Warren Buffet says you are betting on America for the long term.
That said, I admire and appreciate Tom putting out his specific strategy including naming funds and stocks. It's helpful, and thought provoking. I looked at my own IRA and decided that some cash would not be a bad thing in this time of uncertainty. I'm willing to for go some up side to have a little more peace of mind.