Is it time? For the last few years we’ve seen tremendous outflows from equity mutual funds and inflows into bond funds. Folks have been plumb worn out with the vagaries of the stock market and have opted to place their money in investments that promise more stability and safer returns. But even while those people have been fleeing from equities the markets have made a tremendous turnaround. The Investment Company Institute recently released figures showing the net outflow from stock funds from 2009 through year end at right around 250 billion dollars. Over that same period stocks have gained nearly 60%.
These sorts of numbers underscore what we’ve been talking about for years. It’s impossible to time the market and most attempts to do so end up by moving in the right direction at the wrong time or just the opposite, moving into markets just when they are poised to fall.
Far better to decide in advance how much of your portfolio belongs in stocks, basing that decision on prudent financial planning and analysis. Opting for a long term strategy with a diversified portfolio makes sense and it’s the only way over time to make dollars and cents!