With the Dow Jones Industrial Average trading above 12,000 (intraday) the last several trading days, we felt compelled to share some thoughts and opinions on the markets. For starters, what a wild ride it has been. It was just under two years ago (in March of ’09 ) that the Dow dipped all the way down to 6,440.08 from a previous all time high of 14,279.96 back in October of ’07. Simply put, the Dow declined 54.9% and has rallied 86.33% and now remains down 2,279 point or 16.28% off it’s all time highs.
So what’s an investor to do when “The Market” is up 86.33%, interest rates remain at multi-decade lows and commodities (materials, metals, agricultural, and oil to name a few) are teetering near their all time highs? If you don’t pay taxes, don’t need to spend your money and aren’t worried about inflation, the answer might be nothing. It is possible you might even “beat the markets” (all of them) by sitting in cash. The problem is that “relative returns” don’t put food on the table, pay the mortgage or take you on vacation. Furthermore, after taxes and inflation, you really end up going backwards when you go sideways.
If you’re concerned about the markets getting a bit “toppy” and that we are either long in the tooth for a correction of if you are optimistic that the economy is in a legitimate recovery yet we just need some time to catch up with the strong rebound, click below on “read the rest of this entry” and see 4 suggestions to help enhance returns and put the risk of your portfolio in check.