Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Math Junkie who wrote (16058)	6/6/2002 4:07:52 PM
From: sat2000	Read Replies (1) of 42834

I suppose it is possible to make a rational argument for your request so I will give you your choice. Scenario #1. A twenty something single guy saving for retirement. He is smart enough to max out his 401K and IRA. He is just getting started investing so his portfolio is modest. He has no real need to own bonds at this time and he is lucky enough that he has a very smart 401K administrator, one of his selections is a Wilshire 5000 Index Fund. He plows 100% of his contributions as well as the matching contributions too into that total market index. His IRA is in Vanguard Total International Stock Index Fund (VGTSX). He has about 20% in the International fund and the balance in the U.S. total stock market index. Scenario #2. A married middle class couple in their mid 40s. The kids are grown and out on their own. They would like to retire before age 62. They too max out IRAs and 401K plans plus have a taxable account to tide them over after retiring until they can tap the deferred accounts without penalty. The House is almost paid for. The portfolio is getting to be of noticeable size. They have 25% of the portfolio in the Vanguard Total Bond Market index at Vanguard in her 401K plan. About 55%% is in a mix of S&P 500, Russell 2000 Index, Wilshire 5000 funds including about 10% company stock of the Man's place of employment. The other 20% is three different International Funds, one EAFA Index and a couple International Growth funds. Scenario #3. A couple 6 months from retirement and critical mass. Half is in a variety of short and intermediate Bond funds plus some tax free bonds issued by the State they live in. The other 50% is in a mix of Mostly Funds ranging from Large Cap Value and Growth, Small Value, Balanced, growth and Income plus a few shares of QQQ bought back in 2000 <g>. They never sold something once they bought it. They have tried to roughly keep their equity holdings in line with market weightings of the Wilshire 5000. About 35% of this portfolio is in taxable accounts. Scenario #4 This divorced guy has been fleeced by his ex-wife and is looking to make up for what he perceived he lost in the divorce. He listens to as much CNBC as he can get away with. He chases hot tips, and hot performing funds and Sectors. Luckily all his money is in deferred accounts so taxes are not a concern today. He spends all his free time on the Internet in chat rooms, discussion boards, and reading breaking news about the market and economy. He trades a great deal but at the end of the year he seems to have not made much headway despite making regular deposits in his account. So Richard, which of these do you think it would be appropriate for them to try to time the market with up to 5% of their portfolio?

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