Investors' Biggest Challenge:Timing the Market Harvest
You can't avoid risk. But you can manage time.
Stocks easily beat bonds and money-market funds over the long run. But sometimes, the long run takes an awfully long time to arrive, as many investors are now discovering.
Your goal: Manage your portfolio so that your stocks have enough time to deliver on their promise. To that end, try thinking of your portfolio in five-year buckets. Here's what I mean by that:
Looking Down
Over the five calendar years through December 2002, the Standard & Poor's 500-stock index was underwater, posting a cumulative loss of 3%. How unusual is that sort of loss? You can take the 77 years since year-end 1925 and divide it into 73 rolling five-calendar-year periods, starting with the five years through December 1930, moving on to the five years through December 1931, and so on.
According to Chicago's Ibbotson Associates, the S&P 500 lost money in eight of these 73 rolling five-year periods, or 11% of the time. That might not seem like a terrible track record. But some of the losses were pretty steep.
The worst five-calendar-year stretch ran through December 1932 and saw stocks tumble 49%, even after accounting for dividends. Admittedly, that was during the Great Depression. Since the second World War, the worst five-year loss was an 11% cumulative decline in the five years through December 1974.
An 11% loss is hardly a tragedy. Still, if you have money in stocks that you will need to spend soon, it can be harrowing to sit tight through that sort of market turmoil. Indeed, there's a risk you will panic and sell at the market low, possibly losing much more than 11%.
But while there have been some rough five-year periods, things start to look brighter if you have at least 10 years to invest. According to Ibbotson , the S&P 500 has lost money in just two of the 68 rolling 10-year periods since year-end 1925, and both those losses coincided with the Great Depression. The worst decline was a cumulative 9% loss over the 10 years through December 1938.
Lightening Up
What's the implication of all this? If you have 10 years until you will need your money, history suggests you have a good shot at earning decent gains with stocks. But once you get within five years of your goal, the risks rise appreciably and you should be looking to swap out of stocks and into bonds or money-market funds.
With that in mind, you might think of your portfolio in three buckets.
One bucket would contain money you won't need to spend for more than 10 years. With this bucket, I would hold a portfolio that is heavily invested in stocks and use your regular monthly investments to add to your stock portfolio.
Another bucket would contain money that you will need to spend in five to 10 years. This bucket might still be largely invested in stocks. But if you are adding fresh money, you would stash this cash in bonds.
Finally, you would have a third bucket that contains money you will need to spend within five years. This money should be parked in bonds and money-market funds, and any new savings should be stashed in these investments.
Seem sensible? That still leaves a tricky question: When should you sell your stocks and move the proceeds into bonds and money-market funds?
I wouldn't mechanically sell stocks when you are five years away from needing the money. Instead, use your judgment.
If stocks are riding high and you are six or seven years away from your goal, I would go ahead and start selling. On the other hand, if the stock market is in the midst of a brutal bear market, hang tough and wait for a rebound before lightening up, even if that means holding stocks until you are three or four years away from your goal.
Taking Time
All this assumes you will need a big wad of money on a single date. But with two of your most costly goals, college and retirement, you won't need all your money on one particular day. Nonetheless, the five-year-bucket strategy can come in handy.
In the case of college, the bills are spread over four years, which means you may also want to liquidate your stock portfolio over four years.
For instance, you might aim to sell a quarter of the stocks earmarked for college when your kid is five years from his or her freshman year. You might sell another quarter when the kid is five years from the sophomore year, and so on.
Meanwhile, with retirement, you might tap your portfolio over 20 or 25 years, and possibly longer. Suppose you retire with $400,000 in retirement savings and you are aiming for a 5% withdrawal rate, which means your goal is to spend $20,000 a year, hopefully boosting that sum each year along with inflation.
To cover your 5% withdrawal rate for the five years ahead, you might stash 25% of your portfolio in short-term bonds and money-market funds. Think of this as your spending bucket.
Every year, aim to replenish your spending bucket by tapping into the other 75% of your portfolio, which might be invested in a mix of stocks and riskier bonds, including intermediate-term corporate bonds, high-yield junk bonds and inflation-indexed Treasury bonds. You can direct the dividends and interest from these stocks and riskier bonds into your spending bucket.
But to keep the spending bucket full, every year you will probably also have to sell some of these stocks and bonds.
If shares are flying high, look to trim back your stockholdings. What if the stock market is in a funk? I would replenish your spending bucket by selling some of your bonds.
十年投资规划让你稳赚不赔
你无法躲避风险，但你可以控制投资的时间。
从长期来看，股票可以轻而易举地击败债券和货币市场基金。但有些时候，这个所谓的长期需要等待很久很久，目前许多投资者都已经发现这点了。
你的目标就是：管理你的投资组合，让你的股票有足够的时间来兑现它应该带来的回报。为了实现这个目标，你应该尝试考虑把投资组合分成为期5年的几块投资。以下就是我所说的具体做法：
低调看过去
在截至2002年12月份的5个日历年度内，标准普尔500指数(Standard & Poor's 500-stock index)一直表现欠佳，累计下跌3%。这个跌幅有什么特别之处吗？我们可以做下比较，把从1925年年底以来的77年时间分成73个连续区间，每5个日历年度一个区间，从1925年年底到1930年12月是第一个区间，随后是从1926年年底到1931年12月的区间，依此类推。
据位于芝加哥的研究机构Ibbotson Associates称，标准普尔500指数在这73个连续时间段内有8个时间段下跌，占总数的11%。也许这个记录看上去并不是很糟，但在有些时间段内跌幅还是相当惊人的。
标准普尔500指数表现最差的时间段是截至1932年12月份的5年，即使把股息的因素考虑在内，仍重挫49%。那时候正处于经济大萧条时期。二战以后，标准普尔500指数跌幅最大的时间段是截至1974年12月份的5年，总共下跌11%。
下跌11%几乎称不上悲剧。然而，假如你把自己马上要用到的资金投入到股票上，那么，坐视股票低迷不振的表现就成为一种痛苦的折磨了。的确，你很有可能在股市处于低点的时候因恐慌而抛盘，那样你的损失可能将远远大于11%。
尽管按照5年一个区间进行投资有糟糕的时候，但如果你按至少10年一个区间进行投资，情形将变得十分乐观。根据Ibbotson的统计，从1925年年底以来的68个连续10年区间中，只有两个区间标准普尔500指数下跌，而且它们都是处于30年代的经济大萧条时期。跌幅最大的区间是截至1938年12月份的10年，累计跌幅9%。
乐观看未来
这一切意味著什么？就是说：如果你需要10年以上才会用到自己的资金，那么，历史经验表明你将有在股市上获取高额回报的绝好机会。但是，一旦你在5年内就要用到自己的资金，那么你的风险会大幅上升，你应该看准机会退出股市，转向债市或者货币市场基金。
记住了这一点，你可以考虑把投资组合分成以下几大块：
一、第一块投资中包括你需要10年以上才会用到的资金。对于这块资金，我认为可以投资以股票为主的投资组合，并用你每月定期的投资来补充自己的股票投资组合。
二、第二块投资中包括你将在5年到10年内会用的资金。对于这块资金，你仍然可以以投资股票为主，但如果你要补充新的资金，你应该把它们投向债市。
三、第三块投资中包括你将在5年内用到的资金。你应该把这部份资金投向债市或者货币市场基金，而且任何新的储蓄都应该放到这部份投资中。
听上去合情合理吗？但这里面仍留下一个难以回答的问题：你究竟应该在什么时候卖出股票，并把所得投向债市或者货币市场基金呢？
要是我，我不会机械地在用钱之前5年就抛售股票。不，你应该依靠自己的判断力。
如果股市在上涨，而你离自己的用钱之日还有6到7年之遥，那么你可以采取行动，开始抛售。但另一方面，如果股市正处于低迷的熊市，那么你应该攥紧口袋，等待股市反弹，尽管这可能意味著你将持有股票直到用钱之日前3、4年。
从容操作
所有以上分析都是假定你将在某个特定的日子需要一大笔钱。但拿两种你最可能花费资金的目标--子女上大学和你退休--来说，你都不会在某个特定的日子用掉你所有的资金。然而这种情况下，为期5年的分块投资策略可能派上用场。
拿子女上大学这事来说，交费将延续整个大学四年。这意味著你可以在四年之内逐步清算你的股票投资组合。
比如说，当你的孩子离上大学一年级还有5年的时候，你可能就要打算出售专用于子女大学教育的股票的四分之一。当孩子离上大学二年级还有5年的时候，你应该出售另外的四分之一了，依此类推。
然而对于退休，你可能会在20年到25年的时间内动用投资组合，也可能是更长的时间。假如你退休的时候，退休储蓄帐户里有40万美元，而你计划每年支出5%，也就是说你打算每年花2万美元，并希望随著通货膨胀这个数字还能增加一点。
为了提前5年保证你每年5%的支出率，你应该把自己投资组合中25%的资金投向短期的债券和货币市场基金。把这一块看作是你的支出资金部份。
对于投资组合中另外75%的资金，你可以投向各种股票、高风险债券，包括中短期公司债券、高息率垃圾债券和反映通货膨胀水平的国债。每年，你需要从这部份资金中提取一些，以补充你的支出资金部份。你可以把这些股票的股息、高风险债券的收益投到你的支出资金这块里来。 但为了保证你支出资金这部份是满的，你每年可能都要被迫出售一些股票和债券。
如果股市正在上涨，你可以考虑减少股票的持有量。而如果股市在下跌呢？我建议你出售一部份债券来补充你的支出资金。
