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Scared and uncertain is how most of us feel these days, the 'war rally' notwithstanding. And why not? There are plenty who offer roadmaps, but few that are written with indelible ink. I can feel the uncertainty in your responses to my scribblings in this column.
Judy R., for instance, is peeved at me merely for suggesting that stocks remain good long-term investments. "Trying to lure us back into the market at this time is just as ludicrous as Barron's still using Abby Joseph Cohen as an investment 'guru,'" she writes. "When these lingering bubble entities disappear, then, and only then, will I consider investing again."
Judy, I totally respect your opinion. I also think you've put your finger on a problem the market pros still haven't figured out. To wit, some huge segment of the investing public won't be back in our investing lifetimes, at least not the way they were before.
Without you the market surely will survive. But the great stock run-ups caused by fears of being left behind will largely remain a thing of the past. Please write me again when you've changed your mind -- assuming I'm still opining on the stock market.
Bob A.'s got a similar gripe with me. He writes: "What about those who are retired and don't have 'time' to wait around? Their futures are now, and all the prognosticators can take their advice and shove it out the window. What can these folks do just to preserve their capital, much less see it return to 'lofty heights?'"
Bob, I don't have any easy answers. With hindsight, it's clear that folks near retirement age shouldn't have had their spending dollars in equities. All the oft-quoted literature -- even the hypster stuff about how great stocks were -- urged older people to have their near-term investments in interest-bearing bonds.
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The simple rules are that the closer you are to retiring the more of your savings should be in fixed income. I wish I could sugar-coat this. For investors -- as opposed to traders --stocks are a long-term tool. If your time horizon is shorter, or, as you've elegantly put it, if your "future is now," stocks are even riskier than they are for everyone else.
Chuck S. writes with praise and some questions. "Your writing style is refreshing," he says. "I am an engineer and I suspect you could have been one yourself. Do you believe the S&P will yield a positive return for 2003? How about for a 2003-2005 average?"
Fact is, Chuck, I studied history and political science, and nobody's ever accused me of being an engineer before. So I sincerely appreciate your trying to welcome me into the fraternity.
As for where the S&P is going, I just don't make predictions like that. Not my bag. Having said that, I sure hope the broad market goes up during the time frame you specify. It's where most of my investments are.
My favorite recent letter of all comes from Nicholas F. His subject line reads: "Who the hell cares what you think?...Really!"
Touché, Nicholas. And have a nice day.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
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