It’s been fixed (thank you, Marc!), but we had a little Y2K04 glitch yesterday.

If you clicked January 05 over there to the left, it took you to January 5, 2003, when I was telling you, among other things, that you could charge $30,000 of I-Bonds to your credit card and get the frequent flier miles.

Well, bad news for 2004: The Treasury has wised up. You can no longer charge the bonds to your credit card. (‘Oh, no!’ I hear you cry. ‘Who cares about interest – I wanted the miles!’)

Worse still, if you read that January 5, 2003 column to the end, you came to this teaser . . .

IS THE STOCK MARKET SAFE AGAIN?
I’ll give you a hint: No.

Come back tomorrow.

. . . and if you clicked on tomorrow, it took you to January 7, 2003.

On that day, I wrote that the market was no bargain. (Completely ignoring my column, the S&P climbed 24% last year.) But in re-reading it (which I invite you to do), I’m not sure how much I would change, even now. This year – 2004 – certainly smacks of great momentum, with all the added oomph of a presidential year. It may prove to be the second in a long string of big winning years (2003 being the first of that string). But it may not. And, in any event, it’s no bargain.

If you’re relatively young and engaged in a lifelong regimen of periodic investments in the stock market – wonderful! Keep it up! You never have to worry about market timing. You’ll buy more shares when they’re cheap, fewer when they’re dear, and over time, with any luck, you’ll do well.

If you’re at or near the stage where you have to live off your investments, I’d be more cautious in my allocation. And even if you’re not yet at that stage, I wouldn’t be ashamed to have some fairly stodgy investments in the mix, especially inside a traditional retirement plan. (Riskier investments do better outside the retirement plan because if they tank, you can sell for a tax loss, and if they zoom, you eventually take your profit as a lightly taxed long-term capital gain, rather than withdrawing it from the retirement plan as more heavily taxed ordinary income.)

The TIPS recommended here in past years (Treasury Inflation Protected Securities) are not the great value they first were, selling at or even slightly below par. (Par = 100 cents on the dollar.) Today they sell well above par, around my likely golf score if I were ever forced to play 18 holes and not far from my most likely bowling score if I were ever forced to roll 10 frames. Namely, 124. (So you made a 24% gain plus the interest plus the inflation factor.) But I’m not selling mine. They represent a nice core holding within my retirement plan. (In my case, about a quarter of it.) If stocks ever do seem an irresistible value, a few months or years or decades from now, I could shift out of TIPS back more heavily into stocks.

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One other Y2K04 glitch: The Gates $$$ Clock, also at left, shows Bill with $0, flat broke. That can’t be right.

 

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