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  i couldn't agree with you more kilo869    .

 KT6135 ,

  the single most important investment decision you make is  ASSET  ALLOCATION . in other words , what percent of your investments to put in the different asset classes . in other words , stocks - fixed income - gold - foreign - etc .

  in the secular  ( when you read secular , think long term  )  bull market that began in 1982 and lasted through the beginning of 2000 , the place to be was the u . s . stock market . and the higher the percent your asset allocation was in stocks , the better you did . remember the decade of the 90's where a monkey threw darts at the  N Y S E  sheets and beat half the experts . everything made money and everyone figured they were a trader and could day trade and retire . durning this time i was as much as 100 % stock asset allocation . i remember pulling a double in my 401(k) in three years durning that time .

  then we entered a secular bear market in 2000 and suffered losses  in 2000 , 2001 , 2002 , and reached a triple testing of the bottom of that bear market until a cyclical  (  when you read cyclical , think short term  )  bull market began last march . durning that bear market of 2000 , 2001 , 2002 , and part of 2003 , the correct asset allocation would have been fixed income . durning this period of time i was as much as 5 % to 10 % stocks as much as 90 % to 95 % fixed income and remember making as much as 8 % @ year in bonds at that time . my last double of my asset base took alittle less than 6 years durning this period of time .

  since march of 2003 , we have entered into a cyclical bull market that continues today . i missed that market swing  (  you can't call them all right  ) and am still sitting at a 10 % stock market asset allocation and a 90 % fixed income allocation . fortunately , my asset base is high enough after all the money i made in stocks in the last secular bull market and all the money i did not lose in the secular bear market that began in 2000 because i switched out of stocks , that i can make more than enough to live . i have more money than i can spend intelligently .

  i belive in market timing . however it is risky if you're on the wrong side of the market as i have been since last march . for most in retirement , the correct asset alocation is 50 % stocks for growth and 50 % fixed income for safety .

  there are those that say secular markets last for decades and cyclical markets last for months to years . there are those that say that one doesn't know weither we are in a secular or a cyclical market until after they happen . there are those that say that money invested in a money market in a secular bear market will out perform the stock market over that period of time . i believe we are presently in a cyclical bull market inside a secular bear market . i believe this cyclical bull market could end next week , next month , next year . at that point i feel we will test the lows we have already seen in this secular bear market . it is no longer a investors market where  "  buy and hold  "  works as it did in the secular bull market of the 90's . we are in a traders market and you must be aware and set stops to protect your gains and stop your losses .

  not sure if this answers your question  KT6135  . sometimes the answers bring more questions .

 
  KT6135 ,

  you're welcome . keep in mind that this is just my opinion and not meant as investment advice . investing is really personal and what's right for one person isn't necessarily right for someone else . there is risk tolerance to consider too . i'm personally willing to accept the fact that i am missing this excellent opportunity to make money in this cyclical bull market because i have critical mass  (  the amount of money necessary to live the life style of my choice without working  ) . and my stratgey isn't so much to make money now as it is for  CAPITAL  PRESERVATION  .

  p . s . work is a four letter word by the way    

 kilo869 ,

  i remember xerox stock had buyers all the way down . one of my xeroid friends was going to retire a few months after i did  (  he was a few months younger  ) and he switched the other half of his 401(k) into xerox stock at about $ 30 dollars a share . he rode it all the way down and his 401(k) value was one / tenth it's value at it's high of $ 60 a share . he asked me at the time what i thought of it and i said what he was doing is called  "  SPECIFIC  STOCK  RISK  "  and i wouldn't do it with my  RETIREMENT  . he was  IRIF 'd last year . and now he is working for himself / someone else .

  i took my xerox  ESOP  shares as  "  shares in kind  "  and felt real smart at the time cause i was getting those common shares for a cost basis of $ 13.05 a share at a time when the stock was selling for over $ 15.00 a share . i , too , rode those shares all the way down . and have just now gotten back to even on that trade .

  the smartest guy i knew purchased xerox shares at $ 4.00 a share and sold them for $ 8.00 a share and doubled his money and never looked back .

  i have several friends still working for the big  X  and have most or all of their 401(k) in xerox stock and are wondering if and when they can retire .

  the stock market is a pick pocket and at our age we have to be very careful cause i don't have the time or the temperment to make all that money all over again . that's why i mentioned  "  STOPS  "  to prevent losses .

  thanks for sharing your personal investment experiences . i feel it helps others to not have to re - invent the wheel and make the same mistakes .

 I was lucky in the stock question. I left Xerox in 94 and cashed out my ESOP shares at a high and I did well even with the penalty for taxes...it made my decision to leave Xerox a little easier to take when I saw the stocks dive in the years following. I hated to see what it did to so many of my former colleagues portfolios though.

 hi allen, i noticed in one of your previous posts you mention tolerance for risk and that can't be emphasised enough, in finance 102 we called it the Beta factor and any good counselor will try to determine yours, and you should be very honest about that or you won't be a happy investor!