Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Saturday, February 12, 2011

Where are we on the roller coaster?

Source: Blue Marble Research
Click to Enlarge Last year this time there were many blogs talking about avoiding the market. This is understandable because we were only one year into coming off a severe bottom. On the chart we were at the right hand side, probably in the "hope" region, though still many had given up on the possibility that we would ever recover what had been lost.

Here, a year later, and the market is its second recovery year and chugging ahead deflecting all sorts of what seems to be negative information. Where are we now on the cycle chart?

I think most people would agree that we are on the left hand side - probably between "optimism" and "excitement" and, who knows, maybe a bit past "excitement".  Those who had a plan and stuck with  it have fully recovered from the downturn.

We are not yet at the point of "Euphoria" although another 15% and we could be there. Believe it or not there are "investors" still who are mainly in cash after the 2008/early 2009 blowout. Another 15% and you can expect them to show up.Why will they show up? Because, for some inexplicable reason, they like to buy at high prices.

You'd probably be surprised how often I am asked if now is the time to get in. Its gotten to the point that, if I could fit a turban and a crystal ball into my brief case, I think I would. My response is that investing isn't about timing the market.

Here is a quote from Benjamin Graham, the father of value investing: “If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what’s going to happen to the stock market.”

Thinking about where we are on the roller coaster of investing is a fun exercise but the bottom line is that we never really know where we are and how long it will stretch out. As always the DIY investor is best served by sticking to a well thought asset allocation plan and executing that plan with low cost investments.


  1. I love the chart you posted Rob, it explains how losses are born from playing the guessing game when investing based on forecasts.

  2. @Mich Thanks. It is an interesting chart. When you show it to investors for the first time their eyes get big because they relate to the psychological ups and downs - especially after 2008.