I buy and hold but when the market nears record highs, I stop buying. Actually, I might even start a small “reverse” dollar cost averaging and start selling regular amounts back into cash when the market is in record high numbers.

I stopped making contributions to my 401K in about August of 2007. I am ready to start making them again. But I haven’t sold. All that I bought, I held. I do buy and hold, its just that I buy more when the market is down and stop buying when it gets to record highs. I don’t sell much.

as soon as the markets saw it was going to be the bad guy elected, they started the relatively quick tanking that has continued through today and will continue for a while. Had it become evident in Aug or Sept that Obama would lose, the market would have continued upward,, and there would be no recession.

See why it’s so easy to say that I hope O’s policies fail. for if he fails, the USA succeeds.

Anyway, I am not “regurgitating GOP talking points”, I am regurgitating the New York Times circa 1999.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

So you have HUD in July, 1999 directing directing Fannie Mae to provide 50% if its mortgages to people who would (and did) default when interest rates rose.

Conman, do you actually know what you are talking about or do you just spew stuff in order to get a rise out of people. Congress put specific mandated on Fannie Mae and Freddie Mac that at least half of their mortgages had to be “low income”. That happened in 1999 during the Clinton administration when Obama’s current pals were then running Fannie and Freddie and Citi. There was a rather long newspaper article by the NYT at the time (in 1999) that warned that what we are seeing today could be a possible result of what they were doing.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

And so it came to pass. Exactly what was foreseen in 1999 came to pass in 2007. Bush left those Clinton appointed morons in their offices when he came into office as a show of “bipartisanship” and didn’t act to change those regulations. We are being crushed under a Clinton program, not a Bush program. And Obama has the architects of it managing its bailout. Absolutely nuts.

Conman, you really ought to read more. You might learn something.

I couldn’t disagree more. Now is the perfect time to be buying. You want to buy when everyone else is getting out. THAT is how you make money.

“The facts are that it was the Democrats that decided to pursue a policy of using Fannie Mae and Freddie Mac as a welfare program to get low income borrowers into mortgages.”

You need to stop rejurgatating GOP talking points and think for yourself. Do you really believe this entire economic crises is a result of housing regulations that pushed for more minority loans at Frannie and Freddie? The government didn’t and couldn’t force the private lending institutions to make these loans, so maybe you can explain how it is that the entire private banking industry has been hit so hard? Based on the Federal Reserves own statisitcs, Fannie and Freddie held only 15% of the subprime loans. Only one of the top 25 subprime lenders in 2006 was even subject to the housing law you are referencing. http://www.mcclatchydc.com/251/story/53802.html

Maybe you can also explain how these housing regulations allowed for the unregulated securitization of these loans, allowing banks to bundle the bad and good loans to hide the risky ones, get the ratings agencies to give them inflated ratings, thereby creating the current mess where none of the banks really knows how bad the loans are that they hold? So unless you are suggesting that the so-called Citibank creator of mortgage backed derivatives (sorry, they have been around since the 1930′s – look it up) also was in charge of regulating the market, you might not want to bring this point up.

Maybe you can explain how these housing laws led to the problems with the Credit-default swap market? The 2000 Commodity Futures Modernization Act, championed by Senator Phil Gramm and passed by a Republican controlled Congress, exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. It is currently a $60 trillion market that is literally unregulated. The credit-default swaps was what caused Lehman to fail and almost took down AIG, which has cost the U.S. $150 billion so far and counting.

Maybe you can explain how the housing regulations forced the SEC to fall asleep at the switch over the last 8 years? Do the names Enron, Worldcom, Madoff, standford, to name but a few, ring a bell?

Once again, I know that ideologues such as yourself like simple answers to our problems that neatly fit into your “the Democrats are responsible for all of our problems” ideology, but the world doesn’t work that way. The problems with our economy are much more complicated and cannot be blamed on a single regulation or some dude at Citibank. But since understanding the actual causes of the economic recession would require you to consider history, facts and logic, I’m sure you are not interested. It is much easier to surf the conservative blogs and ejurgatate what they tell you to think.

This should have been: “After mid Sept 2008 both equity and corporate bond markets collapsed. The exception was the market for treasury bonds which soared. This was due to a flight to safety and by interest rates being driven down to shore up the economy and mortgage markets.”

Thanks for your indulgence.

In a normally functioning market as investors shift out of equities, bond funds go up as the equity markets correspondingly go down and visa versa.

This relationship has maintained itself though good and bad markets for decades, including the bear market from 3/2000 to 3/2003.

The relationship between interest rates and the value of the underlying principal is inverse, as interest rates go down principal goes up and visa versa. References to bond markets refer to the principal values.

After mid Sept 2008 both equity and bond markets collapsed. The exception was the market for treasury bonds which soared. This was due to interest rates being driven down to shore up the economy and mortgage markets.

Treasury markets have now peaked (interest rates bottoming) and principal values will erode significantly over the next few months. This is because the government now has to reverse course and sell massive amounts of bonds to cover its trillion dollar deficits.

The appetite for this amount of bonds is relatively limited unless the buyers are bribed with much higher interest rates. As this sale of bonds drive interest rates skyward, both treasury and corporate bond markets will crash.

The markets are broken and will remain broken for a while. Each pundit has a different time horizon. Current markets (both equity and bond) are not for the feint of heart.

The era of buy and hold is over. The asset allocation model of maintaining a percentage relationship between equities and fixed income may best be abandoned until normalcy returns.

Unless you are an active student of the market, it would be prudent to ladder your investments (half maturing every 6 months) in 6 and 12 month Treasuries until markets gain sum semblance of normality.

So sayeth me.

The facts are that it was the Democrats that decided to pursue a policy of using Fannie Mae and Freddie Mac as a welfare program to get low income borrowers into mortgages. They compounded the mistake by making hard requirements based on percentage of mortgages rather than looking at the actual ability of these people to pay.

Then the same people that ran these operations into the ground are now close advisers to Obama. The creator of the mortgage backed derivatives at Citi that caused the US housing bubble to spread to a international banking collapse is a close adviser to Obama. So we have now brought in the wolves to guard the chicken coop. The same people that robbed Fannie Mae, Freddie Mac and Citi blind are now looting our treasury.

This isn’t “change”, this is business as usual with the knob cranked up to 11.

Every time Obama opens his mouth, the market takes another tumble. Carter had the same problem.

Yeah you’re right, we “liberals” are always getting bogged down with history, facts and logic. I’m sure it is much easier to ignore all three of these factors and simply pretend there is some instant fix out there that Obama just can’t seem to grasp. Oh, if only Palin was in charge – she would have had the Dow back up to 13,000 weeks ago! Boy, you idealogues sure do provide a lot of entertainment for the rest of us.