Surprise, Surprise!

Wasn't this week a nice surprise?  The DOW closed above 9,000 again!  Well, I'm not sure if "surprise" is the right word, but there were enough cynics to say that the collapse of the American dollar is forthcoming and a whole lot of other bunk that made this week almost like a moment of truth for them, in that their "sky is falling" heresy is a vast over-reaction.  In fact, my friend at work was spouting off those claims as early as Monday, and he had to shut up by Thursday's impressive close.

Cynicism definitely weighs more, which is how the markets fall faster than they rebound, but this road to recovery has gone amazingly smooth (albeit the real test will be that 11,000-14,000 range).  If you've taken notes & memorized everything I've said (or if you just read my May 8th entry), then my expectations might be a bit too conservative, which is fine by me!  I like being wrong when the end result is better than expected, especially when I have a large hedge against my expectations.

The real lesson to be learned is that the "all-in, all-out" approach is best saved for Vegas with the rest of the craps.  Proper investing is a (at times, delicate) balancing act with calculated exposure to all parts of the stock and bond markets.  While my expectations are that the DOW will be above 10,000 by the end of this year, I am not going to direct all of my new money into the Total Stock Market Index fund for a variety of reasons, including the fact that I believed bonds would experience above-average growth this year (highly unlikely given the market recovery, but not altogether impossible), the International Markets are recovering as strongly as (at times, stronger than) the domestic markets, and there is nothing moving this portion of our recovery along aside from the disproportionate freefall from the end of last year into this year.

My day to rebalance my 401(k) investments is August 11th, assuming I find it necessary next month to redistribute my assets, but I have not checked in a little while (geez, where have I been?  My rock-and-roll vampire lifestyle shouldn't disable me from staying up on these things) so I need to take a serious look at them this weekend or next weekend, and start honing in on what my options are.  Most likely, though, I will be making no (or limited) changes.  Most likely, I will rebalance my existing money and leave my incoming allocations alone.