Don’t Invest Now. Keep money in cash.

Hepcat’s Blog. February 1

Don’t Invest Now. Keep money in cash. Expect new lows in 2009 and even 2010.

I would bet that the right time to invest again is when the S & P 500 recedes down further to 600 points or lower (now at 826). Half the level of U.S. private debt ($10-15 trillion) needs to disappear for a recovery. Obama has no magic wand – Bush bought toxic banks using taxes from your future income. Transparency please.

There are good reasons why over 60% of active fund managers could not beat their respective market index. The mutual fund-brokerage industry has itself dedicated to always being invested in something. So they and you have to pay to price when the bear strikes.

I really doubt these guys missed 2008 so badly. I really doubt they can say that they never looked at trends and major market turning points to assess whether their ideas were wrong.

Retail fund companies only make money selling shares to you and keeping you in funds. So they really don’t have your interest in heart. Did you broker-advisor tell you to sell funds or stocks in 2008?

You need to decide yourself when to start investing back in again. Get smarter on investing and be brave.

2008 was not a matter of “seeing something bad coming”. It was simply a matter of following major trends in the market place and acting at the turning points. That’s it; no more or no less—no smarts required.

The lesson for 2008 was the realization that senseless holding of many investments had bad consequences. How many years will it take for you to break even using a “buy and hold” strategy in 2008?

Investors need to actively monitor and manage their own funds. You were wise to kept most of your 2008 savings in cash and to ignore the “sound advice” of brokers – advisors. Congratulations if you sold a lot in the late Spring.

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