14000

[tombrady]

So the Dow's going crazy, everyones excited, even in the face of ever-rising oil prices, the housing market going downhill, and potential terrorist attacks this summer.

Obviously the PE boom is pushing some of this, but many are talking about that coming to a close soon with borrowing becoming more difficult.

As a quick review, the Dow was under 8000 (!) as late as 2003, and since Jan 2006 has jumped from 11,000 to 14,000 (http://finance.yahoo.com/q/bc?s=%5EDJI&t=5y&l=on&z=m&q=l&c=) (~18 months).

Say you had a decent amount of money sitting around to invest. Would you put it in an index fund now, under the assumption that the market will keep going up for a while before leveling out (to say around 15-16000)?

Or would you keep it safe in a standard 5% interest account and wait for the market to drop back down to around 12000 or so (or lower?) before putting it in.

Thoughts?

[Exiled_Devil]

Not sure. but I do expect it to drop when a Democratic nominee is selected, and likely drop if a Dem is elected next November. I don't know how much it will go up before then, or down in the drop, but those tow events are fairly certain in mind. Irrational, but certain.

Exiled

[OZZIE4DUKE]

Not sure. but I do expect it to drop when a Democratic nominee is selected, and likely drop if a Dem is elected next November. I don't know how much it will go up before then, or down in the drop, but those two events are fairly certain in mind. Irrational, but certain.

Exiled

That's what call and put options are for!

[OZZIE4DUKE]

So the Dow's going crazy, everyones excited, even in the face of ever-rising oil prices, the housing market going downhill, and potential terrorist attacks this summer.

Say you had a decent amount of money sitting around to invest. Would you put it in an index fund now, under the assumption that the market will keep going up for a while before leveling out (to say around 15-16000)?

Or would you keep it safe in a standard 5% interest account and wait for the market to drop back down to around 12000 or so (or lower?) before putting it in.

Thoughts?

Unless you need the money in the next couple/few years, put it in the Index funds. And I would buy both domestic (Dow, Nasdaq) indices, and some foreign ones too - or, foreign stock based mutual funds - to take advantage of the world's booming economy. Dollar cost average your investments over the next 12 months, putting 25% in each time, to minimize the negative impact of the market temporarily dropping. If the market goes up, you make money. If the market goes down, you are able to buy more "shares", and when the market goes up later, you'll make money.

Disclaimer: I am not a stock broker nor investment advisor. And no, I have not done this (although I'd probably be better off if I did). I'm playing individual stocks that are recommended by a guru whose newsletter I subscribe to and philosophy I agree with. So far, so good.

[BlueDiablo]

Not sure. but I do expect it to drop when a Democratic nominee is selected, and likely drop if a Dem is elected next November. I don't know how much it will go up before then, or down in the drop, but those tow events are fairly certain in mind. Irrational, but certain.

Exiled

You know, even though I'm a fairly reliable Republican, I expect the opposite. If a Democrat wins the Presidential election, I expect the country to move on with its business and for the economy to plow ahead. I don't think too many people expect any of the Republican candidates to pull out a win following Bush anyway.

Sorry if my comments get this thing moved to the public policy board.

[tombrady]

Unless you need the money in the next couple/few years, put it in the Index funds. And I would buy both domestic (Dow, Nasdaq) indices, and some foreign ones too - or, foreign stock based mutual funds - to take advantage of the world's booming economy.

no kidding man, some of these foreign markets are so tantalizing -- up like 40+% in the past year, etc.

wild.

[dukestheheat]

hey tom,

I would NOT try to time the market in terms of where the Dow 'is' right now, 14K or 12K or waiting for 15K or anything like that. It's best to get out there, so I would advise you to go.

first question is this: what's your time frame as to when you'd need your invested money back in your hands?

If you need your cash back within one year, I'd push conservative and look for a savings account getting a high rate of return; in that case, you're totally liquid and totally safe. Try Emigrant Direct in New York, as they're now providing a 5.05% return on the annual.

If you're looking three to five years out, then essentially I'd go with an International Mutual Fund. The International Market is doing well compared the the US market; my return on my investment in my International Funds Year-to-Date is 13.6%; Large Caps are around 11% and my Small Caps are around 8.5%, comparatively. The 'growth surge' expected this year isn't yet happening, so I keep a good stash overseas. The best thing about any mutual fund is that it spreads your risk over many different companies!

There are certain US sectors that appear out of vogue right now, and on the near horizon, one being 'housing' (for example, Toll Brothers or several of the other builders).

Good luck, investing is a lot of fun and always know that whatever you put out there, over time you're likely to make some cash on it BUT sometimes, you might lose a little of the original investment and you may not actually realize any gain at all.

dth.

[tombrady]

So the Dow's going crazy, everyones excited, even in the face of ever-rising oil prices, the housing market going downhill, and potential terrorist attacks this summer.

Obviously the PE boom is pushing some of this, but many are talking about that coming to a close soon with borrowing becoming more difficult.

... wait for the market to drop back down to around 12000 or so (or lower?) before putting it in.

Thoughts?

Nailed it. Sucker's dropping like a rock.

Of course, it'll probably go up 280 tomorrow.