Buy and Hold is dead-You need to pay more attention

There's an interview on wealthtrack with Andrew Lo,MIT professor,you can watch it here
http://wealthtrack.com/

To paraphrase Lo:
1)Markets are not stable. Investors need to actively manage risk.
2)Investors suffer from “diversification deficit disorder.” In short,
diversification amongst stocks and bonds is not enough.
3)Stocks may perform over the long run, but “buy and hold” is dead. Investors
need to pay more attention to their portfolios in the short run

Have you been on this ride?

Here is a chart that you should print out and hang on your wall. I have been trying to get people back in the market since 3/09 when my relative strength indicator showed stocks being stronger than moneymarket. From talking to people and watching the mutual fund flows,there are still a ton of people sitting on the sideline.

I'm pretty sure that this chart explains why.You can probably understand why a tactical strategy that aims to avoid some of the loss and capture some of the gains has become very popular in recent years. As wealth managers often point out: the trouble is that few investment managers have any skill or experience actually doing it. And, many of them who have actually been doing it long enough to speak of haven't done it very well.

Market gurus? Please ignore them

I'll say it over and over again but this is why you can't pay any attention to predictions. This is really unbelievable when you think about it.When ever these guys open their mouth the market does pretty much the exact opposite
You have to follow the trend-If you listen to predictions your going to get screwed everytime

Is there a HUGE RALLY AHEAD?

Here's another guy's opinion. It makes sense but I'll go with the trend.
Doug Kass refers to the stock market in a recent commentary. He talks about the
large-scale asset realignment that has been going on for the past few years:
According to the Investment Company Institute, in 2011 retail investors liquidated $130 billion of domestic equity mutual funds, accumulated $1.7 billion of international stock mutual funds, purchased $120 billion of bond funds and bought $8.4 billion of high-yield funds. Since
the beginning of 2007 (through 2011), retail investors liquidated over $450
billion of domestic equity funds, accumulated $130 billion of international
stock mutual funds and purchased $930 billion of bond funds. The
near-$1.4-trillion swing out of domestic equity mutual funds and into bond
mutual funds is unprecedented.
Since 2001, as measured by stock holdings as a percentage of total financial
assets, individual investors’ share of stocks has declined from 25% to only 18%.
In the same time frame, stock mutual funds have dipped from 79% of total mutual
fund assets (excluding money
market funds) to only 65% at year-end 2011.
A re-allocation into stocks (and out of bonds) represents an underappreciated
and potentially massive (and latent) demand that could easily be the catalyst
for a move to all-time highs in the S&P 500in
2012.

Super Bowl Rosters Were Filled With Underdog Stories

Here is another example of predictions gone wrong-All of the so called experts that predict who is a 5 star or a 2 star and that is all they do can't get it right
http://footballrecruiting.rivals.com/content.asp?CID=1327387

Is your 401k still in cash?

Each week I read the flow of money as reported by the mutual fund industry. And I know from reading that information that there are alot of people that have missed this rally.
I have said since 10/21/2011 that my main indicator the relative strength of stocks vs. monymarket was what I call a buy signal. At that time the s&p was at 1238.25. As I type this the s&p is at 1343.78. That up over 8%. So there are alot of people that are still not in the market.People that are sitting in cash in their 401k's.
I can almost guarrantee that these people will eventually get back in.They've done this before and will do it again because they refuse to pay attention. They refuse to either monitor it themselves or get someone that knows what their doing . So these peopl if the market continues up will get in and than they'll sit there not knowing what to do.
And you know the ending to this story. We've been there done that.

Why people have financial advisors

I stole this from Josh Brown:

Why do people hire financial advisers? The answer might surprise you. Sometimes they are merely looking for someone to pull the trigger for them when they’re too shell-shocked to invest for themselves. Other times it’s a scapegoat thing - when investments go bad, it’s a small comfort to some that “it was all his idea.”

If you don't have one and you haven't pulled the trigger your missing quite the rally. But the key is not to have to use the 2nd reason. You need a financial advisor that won't have you say "...It was all your fault."