Hedge Your Bets

BECAUSE I DON’T WANT TO END UP like Larry Kudlow, I don’t make claims about whether the stock market is going to go up or down.

- JOSH BARRO

I mean, sure, I expect stock prices to tend to go up over the long run, as they roughly track the growth of the economy. But I don’t make claims about whether the stock market is currently “overvalued” or “undervalued,” or about whether now is an especially good time to buy—not on television, not to my friends, and not even to myself. If I knew in advance what the stock market was going to do, I wouldn’t be writing this article; I would be self-quarantining on my private island.

Since I don’t think I can outsmart the market, my usual investing strategy is just to take the money I don’t need to use right now and park it in low-fee, broad-market equity index funds; set it and forget it, knowing the equity markets are likely to be a lot higher when I retire than they are now. At least that was my approach until the Friday before last, when I sold about a third of my stock funds.