Here's Why You Should Not Time the Market

If you try and beat the odds, how often do you come out on top? Most active-fund managers fail to beat the market. Joe and Al share a more reliable way to invest for your future.

4:12 “As the market declines, we are buying the same great companies at a discount, so now is the time to invest.”

6:24 “You want to make sure you’re diversified.”

7:03 “Small companies and value companies tend to outperform large and growth companies over the long-term. But we haven’t seen that the last few years. Does that mean we abandon that strategy? No, it still works if you give it enough time – that’s where patience is really important.”

11:01 “We have all-time lows for the 10-year treasury…”

12:29 “If you’re a U.S. investor and getting 60% of your portfolio going to return 6% and 40% going to return 1%, you’re talking about a 4% return which is half of the nominal return that the typical 60/40 portfolio has earned over the last 90 years. That’s a real problem for many investors who make the mistake of relying on historical returns; they’re likely to end up alive with no money.”

13:20 “Clearly there are problems in the global economy. The credit markets are telling us a different story than the stock markets. They think that economic growth is very weak and likely to continue to be very weak. The stock market, on the other hand – at least in the U.S. where stock valuations are high – one assumes then that the market thinks growth will be somewhat reasonable.”

17:27 “Bonds are not for return. They are to dampen the risk of the overall portfolio to an acceptable level…”

20:00 “Whatever your political views are, I think it’s important that you hear this message. What the academic research shows is the following: when the party you favor is in power, you earn higher returns than the people in the opposing party.”

22:25 “It’s important to not let your political biases or your political views influence your [investing] decisions.”

29:47 “REITs (Real Estate Investment Trust), to me are the riskiest investments – or at least among them right now – as you can get a higher expected return by investing in a 10-year CD with a hell of a lot less risk.”

32:50 “Get realistic on your budget; take a look at your bank statement… try to figure out where that money is going, what kind of retirement lifestyle you want and then start figuring out a savings plan and start early.”