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All right the week ended with the market's up slightly across the board today putting a silver lining -- a terrible week for Wall Street he beat -- -- about what to do with their money.
But there are a lot of mistakes out there that you want to avoid -- helping us look ahead at next week and what not to do.
Yeah -- investor place dot com we have said Jack otter editor of Barron's.
Jack a lot of people panicky.
When you panic you make mistakes what do you think is the biggest mistake that you see happening out there just in general right now.
Well they're literally been panicky for 45 years so I clearly to me the biggest mistake in money terms is the one point three trillion dollars that have flowed into bond funds.
Over the past six years while every single year people been pulling money out of stock mutual funds.
Even while the market has rallied in this is the best rally we've had since Dwight Eisenhower.
The -- up more than -- 120%.
Every single year individual investors pulling money out finally in the first quarter they got back in.
Could that be the top it's typical of individual investors to stay out until the very end and catch the -- there -- one of those people that has moved and that what would you right now well I have.
I think get the -- -- -- long term asset allocation don't try to guess what the market's gonna do you should be in stocks you should be in bonds but you don't wanna go all one way or the other so can.
It to a now occasion and don't get swayed by what's going on in any of these markets just -- -- allocations to terror and you have write it down promise yourself you will stick to what you won't chase apple tattoo on her leg or something I'm going to great idea of the great okay.
-- let me ask you what's the biggest mistake that you see going on out there right now.
Not -- I couldn't agree -- -- I think that the problem is that.
A lot of people were scared and now we're gonna get gradient and -- and -- -- no way it -- to manage your portfolio so.
I do think that people need to be prudent if they want to -- and you need to think long term I think there's nothing -- -- -- make -- -- sector plays if you -- -- get defensive focus on dividends consumer staples but.
I completely -- Following neighboring that's -- we just got to tinker and I don't want to confuse the people out there on the audience right now so.
So pick your poison -- what's and I really DO.
I mean if if you're talking general advice forever on I bad Virginia -- a low cost index fund like the vanguard S&P I mean that it works for 99% of people but you know photographs of people like me they have been elected -- -- welcome -- Okay.
Maybe you satisfy a small portion airport Foley that your tinkering with carrier you -- -- -- an -- you don't deviate from that and I'm trying to find a middle ground Jack another big mistake.
I this I haven't seen written -- covered at all but I looked into some.
Trade publications that cover the insurance industry.
And in recent years whole life insurance has been doing much better sales going up nicely every year while term life insurance.
Sales have been going down well guess what term life insurance is better for about 99 point 8% of the population why.
Because it is far far cheaper and that's the reason people don't buy it because there's no salesman to sell something that she.
They sell the expensive product whole life and they prey on your fears -- always feel pulling money out of stocks have been told well the stock market is scary but this whole life insurance is a good investment.
It is not a good investment for most people if you're extremely well -- hedge fund guy with cash flow coming out your -- it actually is great.
But for most people term life insurance is much better.
Until your kids are grown don't you don't need life insurance anymore and then you're done interest.
Jeff haven't you with another big mistake that you see out there.
Well I'm actually a little bit scared maybe -- a strong word I'm concerned about housing right now.
I mean a lot of investment that we've seen in some of these regions that were hard hit like Las Vegas and Orlando.
About half of the sales that are going on right now are done with -- -- these are speculators investment people that's how bubbles are made -- you have to understand too that that is really really cheap so the fact that.
You're getting these you know people are passing on a thirty year mortgage ordered just buy a house with cash but you tell you everything you need to -- so I'm a little.
Although cautious about hot housing just because -- seen this huge run up in in home building stocks a lot of optimism prices -- -- 10% year over year.
But do you think -- -- -- -- in the making even though that we even -- we haven't gone back to where we work has a lot of people say it's it's early days yet housing you think we're just building up.
-- -- -- And I wouldn't call -- another bubble what I would say that you need to expect us to -- I mean there isn't gonna last forever that the interest rates are gonna go up and just like is he -- after the Obama.
Package in 2009 where there's a big interest in homeownership to get a thousand dollar tax credit -- roll back.
I mean you're gonna see some serious roll back when interest rates go up and people are paying a lot more on a monthly mortgage payment and then also the -- houses are gone short sales have been sucked up by the speculators.
And after the speculators have their properties if Iran not for hefty profit.
I mean if it's gonna have to plateau so I wouldn't say a crash but I think people have to be realistic housing is not a good investment I -- last month there was a survey that said that -- investment classes Americans -- -- -- right now we're golden housing and -- house bill help gold dollar and a couple weeks for us.
Yeah hand careful and how's your housing market makes a lot of sense CLE it would be so unlike the government to create another bubble somewhere and -- a short dislocated market that would be shocking thanks about the great ideas we appreciate it good at odds are more.
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