"Through adventure we are not adventuresome." -- 10,000 Maniacs, Can't Ignore The Train
There are good times to invest in equities as an asset class. There are good times to invest in specific companies. Since the TSP do not afford the opportunity to invest in specific securities, we are left with the alternative of investing in instruments whose performance is supposed to track a particular index.
Since we are forced to look at particular asset classes rather than specific instruments, the single most important variable, at least to me, is how economic factors will affect companies as a whole -- specifically with respect to the revenue line.
The equation is relatively simple -- when revenues are increasing and debt is low or stable, it bodes well for equities. When revenues are dropping, it bodes poorly for equities. Should revenues fall enough, debt of companies becomes questionable as well.
We know that revenues for companies are dropping. Looking at the near future we can see that revenues may continue to be falling.
The decision to invest in a broad index now is only based on either supernatural knowledge or a guess.
Guessing can be done and done successfully -- but you can not kid yourself when it goes against you and see the decision as part of a long term investment strategy.
There are good times to invest in equities as an asset class. There are good times to invest in specific companies. Since the TSP do not afford the opportunity to invest in specific securities, we are left with the alternative of investing in instruments whose performance is supposed to track a particular index.
Since we are forced to look at particular asset classes rather than specific instruments, the single most important variable, at least to me, is how economic factors will affect companies as a whole -- specifically with respect to the revenue line.
The equation is relatively simple -- when revenues are increasing and debt is low or stable, it bodes well for equities. When revenues are dropping, it bodes poorly for equities. Should revenues fall enough, debt of companies becomes questionable as well.
We know that revenues for companies are dropping. Looking at the near future we can see that revenues may continue to be falling.
The decision to invest in a broad index now is only based on either supernatural knowledge or a guess.
Guessing can be done and done successfully -- but you can not kid yourself when it goes against you and see the decision as part of a long term investment strategy.
