Some good reads from around the Web.
I enjoyed Don’t be the dumb money by Allan Roth [1] this week – not least because I’ve been slightly trimming my equity exposure in recent days, and it’s always good to be reminded why.
As Roth writes:
When stocks were surging through April of 2011, investors poured $38 billion into U.S. stock mutual funds during the first four months of the year — just in time for an ensuing five-month decline that nearly hit “bear” status. Investors subsequently pulled $179 billion out of stock funds — just in time to miss out on the recovery.
And now that stocks are hovering around that all-time high, can you guess what’s happening? Yes, for the first two weeks of February, investors have put nearly $5 billion back into stocks.
It seems one cannot repeat this message enough. Personally, I was buying heavily again when the FTSE went below 5,000 back in August. And happily, so were many Monevator readers, judging by your comments [2] on my report at the time.
This house believes the best way for most people to invest is passively [3]. That includes you and me most likely, though it will be years until we can know for sure.
But if you’re going to play in the murky waters of active investment, then whatever you do don’t follow the crowds in at the top and out at the bottom – unless you truly appreciate the hard work of City folk, and aspire to make them richer!
(Just to be clear, since this is the Internet and most bloggers are hysterical, I am not calling the top of the market here, or anything like it. I was extremely long equities by the end of 2011. Now I’m slightly less extremely long – but I still think the stock market is the best place for the bulk of my cash, at present, on my usual long-term view).
From the money blogs
- The Total Economy portfolio – Rick Ferri [4]
- Time diversification – Wade Pfau [5]
- Complete transcript of Buffett on CNBC – My Investing Notebook [6]
- Middle-class finances: Death by 1,000 cuts – Simple Living in Suffolk [7]
- Why willpower isn’t the secret to saving money – Mint [8]
- Learning from Lauren Laverne – Richard Beddard @iii [9]
- A sign of slumbering – or of hope? – Vanguard blog [10]
- It pays to start retiring early: A realistic analysis – Oblivious Investor [11]
- Warren Buffett’s 2012 letter: Redux – The Dividend Monk [12]
- Euro break-up not a disaster shock – Terry Smith [13]
- The ideology of inequality – Stumbling and Mumbling [14]
Book of the week: With cries of ‘do something!’ echoing again around Whitehall and Washington, it’s time some brushed up on Milton Friedman [15]
Mainstream media money
- Technology quarterly (including the flying car) – The Economist [16]
- Global poverty: A fall to cheer – The Economist [17]
- Northern Rock: Bad bank going good – Peston/BBC [18] & Independent [19]
- School for quants – FT [20]
- Property sex wars – FT [21]
- Standard variable mortgage rates to rise – Telegraph [22]
- Silly article about gold [But check out the batty comments!] – Telegraph [23]
- Don’t shun ISAs: They are a bet for the long-term – Independent [24]
- 0.5% base rates have cost savers £60 billion – The Guardian [25]
Like these links? Subscribe [26] to read them every weekend!