How high is up?

[pscot]

The last two years there's been a remarkable run in the stock market. With the exception of Japan, stocks are up around the world. Despite a shrinking dollar, rising oil prices and a meltdown in building and lending sectors, the Dow and the S&P keep chugging along, Americans keep spending, and China keeps pumping out the trash we buy. The Chinese economy grew at an 11.5% annual rate last quarter and is set to move ahead of Germany as the world's third largest economy.

I have a considerable portion of my modest stash in the market, and the market "have been bery, bery good to me" over the last 20-or-so months. It's also scared the crap out of me a couple of times. I'm still hanging with it, but lately I've been starting to feel like a cat sitting on a hot stove. So my question, how high is up? Are we near the end? Or can this run be sustained for another year? Two years? Please,shre your collective wisdom.

[BOSSHOG]

1. If your dabbling in stocks

Your time frame should be more 10, 15, 20 years, not months or a couple of years. Stocks aren't for the skiddish, its all a matter of how much pressure you can take at the prospect of looking at the paper every day and seeing your value has gone way down (or way up.) Mutual funds have dones us very well for 15+ years now but I am in my mid 50's and am shifting ever so slightly to safer stuff (Bank CD's). But I'll continue to dabble in the Mutual Funds. A diverse portfolio might serve you well. Some in high risk, some in no risk and some in between. And it depends on your age, the younger you are the greater risk you may want to take. Good luck, buying stock is sometimes like strolling through the welcoming doors of a Casino.

[pscot]

2. I no longer buy individual stocks

Mutual funds spread the risk. Owning several funds lets you diversify accross different sectors or regions. I weed out the ones that don't perform the way I expected, and keep those that do well. In 2000 I was looking at the long horizon you mention, and I took quite a hit. I don't want to ride that elevator again. By the way, I'm pushing seventy, and I find that greed does not abate with age.