I was at my in-laws’ house in Delaware this past weekend, reading their local paper. One of the stories was about Sussex County’s pension fund (again, the Sussex County in DE, not NJ).
According to the story (couldn’t find it online), the county decided to put the majority of its new money into cash for the coming year. Then they would wait for signs that the market was coming back before putting those funds into stocks.
When a government official questioned the decision, asking if the county wasn’t running the risk of missing out on market upside, the plan adviser said he didn’t believe in “market timing.”
Well, from the article, it sounded to me like that’s exactly what the pension fund is doing!
Putting new money into CDs and waiting for a market rebound? Talk about selling low and buying high!
If you’re truly against market timing, you simply allocate your funds based on a set strategy year after year. Then rebalance at appropriate intervals.
It amazes me to hear institutional money managers making such fundamentally wrong decisions. And if I were a Sussex County employee, I’d be questioning this investment strategy.
The good news is these stories demonstrate two things:
First, fear remains at inordinately high levels, even from professional money managers.
Second, a lot of cash is going to sit on the sidelines and then pour into markets once we see signs of “stability.”
Both items are good news for investors getting into stocks now.
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I also agree 100%. My daughter knew the pilot of the 1st plane and had visited his home on several occasions with her friend.This is really sinking to a new low, to profit on the trajedy of others under the pretense of collectors
item. Give me a break !!I saw the adds today on the Weather Channel just after noontime.
I have been a goldbug for decades. But now Nick Guarino is claiming that gold could soon tank, simply because in a depression, everything will go down. I am undoubtedly oversimplifying Guarino’s message, but I’m not a financial expert.
I figure that gold might sink for a year or more, but will always come back. In the interest of keeping more immediately fungible assets, I will of course be estimating what percentage I will leave in precious metals. But that still begs the question. Have you any extra perspective on Nick’s scary message?
Nilus Mattive Reply:
February 11th, 2009 at 9:50 AM
Hi. Yes, if we see a serious deflationary cycle, I would expect gold to fall in value along with nearly everything else. Cash is really the best bet in that scenario.
However, the circumstances today are certainly unique. If you believe that all the world’s currencies are at risk, the U.S. is on the verge of collapse, etc., etc. and gold helps you sleep well at night, then I don’t want to be the one to change your mind.
Nilus, with the Canadian dollar down around .80 cents which canadian bank would you recommend. Also what do you think of a little company called Questerre Energy ( QEC ) which trades on Toronto. They are debt free with $88 Million in the bank and loads of land in Quebec with a sweet deal with Talisman as well as loads of promising land out west. Thanks, David
Nilus Mattive Reply:
February 11th, 2009 at 10:16 AM
Hi, David. I’m planning on doing a future issue of Dividend Superstars all about Canada. So keep your eyes peeled for that. As far as financials go, the risk is still relatively high right now. Not sure you want to go after any of them .
I’ll have to look into QEC a little more. Don’t know anything about the company, but your quick description sounds interesting.