You shouldn’t invest in stocks simply because you’re young. Nor bonds just because you’re old. Your decision to be invested in either stocks or bonds should be entirely based on how those asset classes are likely to perform in the months and years ahead. And as conditions change, you need to remain nimble, ready to adjust your portfolio to accommodate new developments.
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Jim Cramer's Actions Alerts Plus is a subscription service offered through TheStreet.com. It allows investors to trade alongside Cramer as he makes investment decisions for his charitable trust stock portfolio. With over 70,000 paid subscribers, the service appears to be very successful. But just how well has the Action Alerts PLUS Portfolio performed over time? And how does Model Investing stack up?
The concept of momentum originated with regard to classical mechanics, in which it refers to the tendency of a moving object to keep moving along its direction of travel. In finance, and especially with regard to investing, we talk in terms of price momentum. As you can infer, this is the tendency for asset prices to continue moving in the same direction they are currently heading.
During the last few decades, bonds have developed a reputation as being one of the safest asset classes to invest in. This is unfortunate because that false sense of security is going to take a large bite out of the retirement accounts and portfolios of many investors.
Stocks? Bonds? Cash? Where should your money be invested? Over the last few decades it has become commonplace to talk about stocks and bonds from a fixed-allocation perspective. This approach to portfolio management has become ingrained in our society; however, it is a very dangerous way to approach investing.