Most passive investors have a core asset allocation that they try to stick with, i.e. 70% equities, 30% bonds/cash/cds. If the market is really up then maintaining that asset allocation forces you to sell equities and buy bonds in a rising market and vice versa in a declining one. If you are convinced this is a top you could change your desired AA, but that would be a once or twice a decade thing. If you are switching your AA every year you are trying to time the market.

There have been so many studies that show people fail miserably calling market tops and bottoms. I tend to agree with you that this bull market is getting long in the tooth but who knows if that means this year, or next? Most likely we won't see the catalyst that causes the turn coming.

I've told myself I won't be passive if it looks like a 1999 / 2000 type bubble, but who knows if I will see it coming? I am trying to lighten up on equities a little.

Valuation fluctuates about a midline. "Buy (don't sell) well below the midline, sell (don't buy) well above the midline" is pretty good advice. That's all that the P/E vs return graphs say, and it's the nearest thing to a sure bet in the market.

What you do in between doesn't matter so much, you're not making a big mistake unless you're staying out of the market entirely for very extended periods.

Thanks for the responses.

If I want to observe this "mid-line" that prices fluctuate about, what are the types of Google searches I should be doing?

Would this be the "moving average"? If so, how many days should I be looking over (e.g. 365 day m.a. 50 day m.a.) ?

Not sports betting. It's extremely unlikely that he can just decide on a whim to start winning at that.

Poker if he's a winning player. If you're asking this question about yourself, then I have to assume you're not yet a winning player. You can try becoming one. Deposit $50 and play the .01/.02 tables. When you've grinded your $50 into $100, try the .02/.05 tables.

There's also, you know, a job. Those tend to increase one's funds. As an advantage over poker, you'll never have a day where you work all day, even work overtime, only to have less money at the end of the day than you started with.

Yea-huhh it duz
Will learn.
True. I hadn't thought of that.
I was kidding.

What's a good strategy to buy an equity? I usually place a limit order for something like 1% below the market price. Is that about right? I'm just buying ETFs with savings every few months.

whats the best place to open a roth IRA?

What do you want to invest in?

almost certainly Vangaurd

i don't know...what are the best things to invest in? lol

For you I would recommend Vanguard and select an age appropriate Vanguard Target Retirement fund.

I doubt if there is any evidence that this would increase your return, but if it makes you happy, go for it. I personally would just place a market order when I was ready to buy.

My mom is currently 55 and works for the health care district. Her official retirement age is 67, but due to a few health issues, she expects to only make it to 62. Her salary is around 36k a year and she expects to be receiving $800-$1000 from social security.

She lives in town-home which she put down $90k on 275k and took out a mortgage for the rest. After the market crashed, the house plummeted in value. She currently owes 151k and it's valued at 174k

She has a pension with 133k in it already and she will continue to add $200 a month to it. Her monthly nut is3k and she has no credit card debt.

She has 58k from my dad's pension after they divorced. She met with a financial advisor today and he is telling her to stick her money in a variable annuity(polaris with sunamerica), but i am not sure if that is the best option for her. Where should she invest this 58k? Any help greatly appreciated (please move if this is the wrong thread)

A variable annuity is a great deal for the FA but a terrible deal for your mom. Just go to Vanguard and open an account and dump it into Vanguard Target retirement 2020.

""It's all about protection," said Robert DeChellis, president and CEO of Allianz Life Financial Services. "No one has control over the market the day they're retiring."
But that guarantee comes at a steep cost in the form of much lower returns, higher fees and tax consequences compared with traditional investments in stocks, bonds and money markets.
Annuity policies, fees, charges, investment options and tax treatments are complex. Tony Bahu, a former independent insurance agent who sold annuities, says agents don't really know what they're selling or don't fully disclose all the costs.
"They made these things sound like they're a cure for cancer," said Bahu. "The agent goes out and maybe doesn't do his research and just believes what the insurance company is stating (and sells) this thing without proper knowledge or with bad information."
The Costs
So what are the charges that can eat away at your returns?
Start with mortality and expense, or M&E. According to the Securities and Exchange Commission, M&E typically costs 1.25% of the total account every year. This is for taking on the insurance risk of the annuity contract. It helps cover the company's costs, such as paying the insurance agent's commission
"

Tell your mom to ask a couple of her friends if they'd recommend their FAs to her and try to go with her to meet a couple of them. I'm not saying an annuity doesn't fit your moms needs, but they are more over-prescribed than ADHD medicine.

I don't think unfrgvn is anti annuity, just anti variable annuity, which is a position I am in agreement with.

There are lots of immediate annuities that can be perfectly fine.

The key with anything is of course read the fine print and do the math.

Name one.

this is very cool, thanks. Man those emerging markets indexes can be champs or widow makers.

I am anti variable annuity. Low returns, no liquidity, and massive fees are three good reasons why. However, I believe that for some people that want or need income certainty an immediate annuity can play a part in portfolio planning. That seems to be a consensus among the financial writers that I trust, so not sure why you are skeptical?

http://www.immediateannuities.com/

You linked to a website that is selling annuities. Did you check the rates that you can get from a highly rated provider?

I am not skeptical. It is extremely rare for immediate annuities to be a good idea.

Thanks a lot for the responses guys, ill pass on the info

What about a couple who is 68 years old, have $500,000 in investments, spends 50k a year and gets about a 25k a year in SS? They could invest $250k in an SPIA and get the $25000 they need guaranteed.

I'm not that strong on these, but I believe they can have a place. I don't think they are a fit for OPs mother.

Did you get that 10% minimum payout as an actual quote from a highly rated insurance company for a couple's entire life (joint and survivor) aged 68 with an inflation rider?!?

Probably a stupid question, but I have a 1 year old son. Looking to invest roughly $200 per month for him until he is 18, and any other gifts etc. I've heard about the 529c I believe it's called, but I don't want the money necessarily earmarked for college. My goal would be for him to buy real estate with whatever money is there. Are mutual funds a bad way to go? And what other avenues should I explore?

No. So I tried a couple of quotes, and it looks like a 68 YO couple would get about a 6.3% payout dual survivor, and it would not include inflation protection. It would take about $400k to get the $25K guaranteed. I concede your rightness.

On the other hand, many people feel that a 4% withdrawal rate is the maximum "safe" rate for a portfolio with a 30 year time span.
(Quoting William J. Bernstein) "Two percent is bullet-proof, 3% is probably safe, 4% is pushing it and, at 5%, you're eating Alpo in your old age," reckons William Bernstein, an investment adviser in North Bend, Ore. "If you take out 5% and you live into your 90s, there's a 50% chance you will run out of money."

So some may feel a 6.3% guarantee on 80% of a portfolio is worth it, if it meets their spending needs. The mythical couple can invest the remaining $100k for inflation protection.