Transcripts

"Money File"-Investing in Turbulent Times

JEFF YASTINE: In "The Money File" tonight, investing in the midst of a perfect storm. Here's Jonathan Pond, author of "You Can Do It: The Boomer's Guide to Retirement."

JONATHAN POND, AUTHOR, "YOU CAN DO IT!": Concerns about the economy and the investment markets have caused a lot of investor angst, to put it mildly. Is this a perfect storm, a harbinger of a long period of awful investment performance? This isn't the first time that everything seems to be falling apart. But the plethora of concerns isn't going to afflict us forever. The credit and housing crises will end, corporate profits will rise, any inflation will moderate, unemployment will fall, and consumers will spend anew. Now the cost of oil is the one big uncertainty, but economies and consumers will eventually adjust. Perhaps persistent high oil costs will goad our elected officials to action on energy policy after decades of inaction. Now it's important to resist the hysteria that often influences the investment markets by maintaining a consistent approach to investing. Succumbing to prevailing market wisdom is why so many investors, and investment pros, fare so poorly with their investments. Avoiding the herd mentality can help you avoid ill-timed investments. It's possible to be both a consistent investor and a contrarian investor simply by periodically re-balancing your investment holdings to get back to your target diversification. Re-balancing now will probably mean you'll be adding some stocks-- not a lot-- to your portfolio when the pundits are saying sell. That's a good thing. I'm Jonathan Pond.