January 3, 2012

The Cotton Candy Rally

Barry Ritholtz, writing for The Big Picture:

“The bottom line is this: These rallies are for traders, not longer term investors. We remain mired in a long term secular bear market — and that means preserving capital and managing risk. Yes, you can be opportunistic, but that is a secondary, not primary objective.”

Some say free advice is worth what you pay for it. If that were true, evening cable news channels would only show video of the sunset. It's all food for thought.

I've benefited from a handful of free investing and economic columns, among them this one by Barry Ritholtz. Barry has a clear, understandable manner to his writing, making it accessible to the little guy (me). His thoughts have panned out over the long term.

I'm watching the morning chat on CNBC as I write this, where they're kicking around prospects for 2012. Interest rates, corporate profits, the European debt crisis are all in the mix. This is the time when I ponder what to do with our retirement investments in the coming year.

I've noticed a mild uptick in (some) equity investments over the past month or so, as well as a surge in our small business's top line income. A mild recovery appears to be at work in the US. I wonder if perhaps I should move a fraction of our balance back into stocks.

And then I read Barry's thoughts. I'm a long-term investor, not a trader. So I'll be staying out of equities for a while yet. Debt investment did very well for us in 2011. Thanks, Barry.