Gary,
I think you are misreading my "argument" if you wish to call this one.
I am not saying that people will not redirect their investments from stocks to, lets say "guaranteed interest" accounts. I'm saying the level, or percentage of investing will not change.
For instance, the company I work for matches my contributions 50% or 50 cents to the dollar up to 5% of my salary.
I can save up to 12% of my salary, but they will only match 5%. So I only save 5% of my salary in my 401K. I get a 50% return on my investment immediately. That deduction will not change regardless of anything the market does. I may change directions, but I will not save any more or any less.
I make a lot more money by taking the remainder of the money I can save and having my own, personally chosen and self directed "mutual fund", my portfolio.
Now to change the point slightly. We all know that the majority of the investment community buys at the top and sells at the bottom. The reasons really don't need to be discussed, but the fact has been proven. So in most cases, what your friends may or may not be doing, you can do the opposite. (depending on your friends, of course)
If you can't understand what I am saying, I guess we will have to agree to disagree, because I intend this to be my last public post on this subject.
Anyway, have fun, I know I am,
Phil |
