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Mutual Funds/investing in a higlly valued market


Dear John,

     I invest in the large index asset classes only and when I look at the 1 year returns I`m amazed at the returns in the high 20% ranges. I do have some funds available for investment at this time but I`m very much hesitant to put them to work at these high levels. I know about dollar cost averaging etc. but I also know about compounding too. I`m not really a market timer but want to get value for my money. What is your feeling?

Hi. This is a diffcult question to answer as what you are trying to determine is whether timing the market makes sense or not. If you have a long term investment horizon then at some point in time, even if the market pulls back right after you invest, it will one day be higher. With the market up 20% this year and also up strong last year, it will eventually pull back. However, it is impossible to know exactly when, for how long, and to what extent. If it helps, I will say that my investment dollars are assuming that the stock market will be just fine over the next 12-18 months and I also feel investing on other areas of the gloab lstock markets that havent performed as well as large US makes sense (core international and emerging mkts). Sorry I can't offer any more specific advice and thoughts than this.

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John D Smith, CFP


I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related comprehensive wealth management and investment concerns.


I have been providing fee only investment management and comprehensive wealth management services for the past 19 years.

I have a degree in Financial Planning & Counseling and I am also a Certified Financial Planner practitioner.

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