|This ain't me!|
So what did I do? Did I do an NFL endzone dance? Did I make the motion to move the chains as footballers do when they eek out a first down?
Nah. I passed on all of these and not just because my dance would be horrible. The fact of the matter is that the game was not the goal. The goal is to win the championship, and this was one small step.
You're probably wondering what all of this has to do with investing. Well, fact-of-the-matter is I'm being run over by more and more people doing a victory lap after last year's monster year in the stock market. Some are the same people who, of course, were walking the ledge in 2008 looking for a good spot to jump head first.
You know what's coming. YOU HAVEN'T MADE ANYTHING OR LOST ANYTHING UNTIL YOU SELL OR START DRAWING DOWN THE NEST EGG! In fact, one day I'm going to write a post titled "I didn't lose anything in 2008 even though I was 70% in stocks." Maybe this will fool some people into thinking I'm the world's greatest stock picker ;)
As it turned out, I stuck with my asset allocation and accumulated funds at bargain basement prices, as many people did, and today we are way, way ahead of the low point in 3/2009.
If you're getting the message here, you are understanding that victory laps here can very well be premature. I n fact, if you feel the need to do something, this is a good time to review your asset allocation and make sure it is where you want to be. It is a good time to review your bond positioning to make sure it is where you want to be. Save the high-fiving for down the road.
A tidbit for the older crowd as you do this: New York Life is advertising a 6.3% payout rate on single premium annuities for 66-year-old males. For $100,000, you get $525/month as long as you live and, if you kick the bucket soon, your beneficiaries get back what you paid in. As always, you should limit the amount of assets you put into annuities because you lose control of the money! Just as important - know what you want going in. Insurance sales people are some of the best on the planet at selling you what you don't need!
Disclosure: This post is solely for educational purposes. Investors should do their own research before making investment decisions.