A Typical first week?

Some are saying this is the first time in 56 years the stock market is up 5 days in a row...to start the year...like any sporting event (game) all players, coaches, fans, referees and the opposition all try to figure the whole game out in the first 5 minutes...everyone is nervous, excited and ready to play! But the "game" has just started and has a long way to go..as always. Just like Barkly each morning, he is ready to go but chooses to pace himself throughout the day. But the Stock Market is Different- it is a huge, exciting, and now very global exercise that involves many people from all walks of life with various degrees of intelligence and experience.

ASSET ALLOCATION

Smart Institutional Investors suggest 100% of investor returns derive from asset allocation, relegating security selection and market timing to an inconsequential role. Careful investors pay close attention to the determination of asset class targets.

Three basic investment principles inform asset-allocation decisions in well-constructed portfolios.. First long-term investors build portfolios with a pronounced equity bias. Second, careful investors fashion portfolios with a substantial diversification. Third, sensible investors create portfolios with concern for tax considerations.

Unsurprisingly, basic investment principles seem to find little support in real-world asset allocation activity. When markets make radical moves, investors demonstrate either the courage or cowardice of their convictions. Fully 95% of active investors lose to the passive alternative like index funds!