These are the Times

I don't like to provide commentary on current market conditions. We all know the aggregate success of stock markets over long periods of time, and that is what I am most concerned about since my time horizon is in excess of ten years. Apart from a few months in 2002 when I believed oriental rugs where a better investment then equities, I have always had and continue to have a great amount of faith in the ability of equity markets to provide positive returns.

I am using this current opportunity to sell shares of Duke Energy and their spin off Spectra Energy. I will invest the proceeds in the Dodge and Cox Stock fund, whose price has been effected to a greater degree by the current market meltdown than the two previously mentioned companies. I have been divesting my portfolio of individual stocks for the past year, and am moving toward a portfolio of almost exclusively index funds.

Although I am relieved that the credit exuberances of recent times have finally caught up with the markets, it is always a disappointment to see your net worth travel south without seeing a new sport car in your driveway. When weeks or months like this do occur, I tend to hunker down, sort of get in front of the TV with potatoes chips and wait it out. I don’t like to make changes, and just stick to the plans I made in happier times. I also think markets like these help produce greater returns down the road, after the sharp contraction, the rapid expansion, but I don’t bet on these theories and don't suggest anyone else does either. It just gives me something to dream about during the dark nights.

A theory I am interested in learning more about is the "sell in May and go away." That is, the divesting of equities in very early summer, and the repurchase of them after Labor Day. I am not an advocator of market timing, and don’t think that if it can be done I am the one to do it, but I would like to hear any comments about this strategy anyone may have.