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Home | Getting Started | Personal Finance | Q & A | Sample Portfolio | Glossary | About Us |
| Date: Thursday 02nd 2010f September 2010 12:08:06 PM |
|
Q & A - Stay Invested in Stocks - 05/20/2009 |
| By: Hari Wibowo |
| Name: Ed |
| Website: http://child-custody-forum.com |
| Date posted: Wed, May 20, 2009 |
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Question:
Now that the stock market is so far down, should I move all of my money in my 401(k) out of stocks to something like bonds until the market comes back? Should I keep my money in stock and add to it. I have more than 20 years to retirement. |
| Answer: |
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Hi, Ed. In our humble opinion, we need to stay
invested in stocks over the long haul. Now, while the major market index has
plunged close to 50% from its high in October 2007, it has brought us many
well-managed companies at excellent stock price. Of course, we don't just
buy any stocks out there that has dropped. As usual, we focused on stocks
that are trading below fair value. The lower the better, but generally we
are quite contempt with stocks that can give us 50% potential appreciation.
In this era of declining earning, this safety buffer is necessary to have. A
lot of our writing has been dedicated to this concept of fair value. You are
welcomed to view the various commentaries to understand more about fair
value.
Furthermore, cash is and will always be king. We find comfort in companies that have ample cash on its balance sheet. |
| Hari - Novice Investing |
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END |
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Hmm, I am confused. And I have questions |
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I'm fine, thanks. Bring me back to main page |
| Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding any securities. |
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