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Saturday, January 06, 2018

Bob Brinker's Latest Investment Advice

Bob Brinker has a weekly radio show "Moneytalk with Bob Brinker" and writes or contributes to two investment letters, "Marketimer" and "The Fixed Income Advisor."  His Son, Bob Brinker Jr., owns the fixed income newsletter and Brinker Sr. is listed as a contributor.  Bob Brinker Sr. started "Marketimer" in the 1980s when Bob. Jr. was just a lad.

Bob Brinker
, in his January 2018 "Marketimer" newsletter, remains fully invested with his model portfolios one and two 100% in stocks.  He has not taken any profits or raised any cash for any potential corrections or bear markets.


 "The Current Marketimer economic outlook for 2018 does not anticipate a recession... the risk of a bear market decline in excess of 20% is low... the most likely risk for the stock market is the development of a mid-term off-presidential election year correction. Whether such a decline is a major correction of 10% to 20%, or a smaller decline of less than 10%, remains to be seen... all Marketimer portfolios remain fully invested." 

Bob's Advice for New Money:  Bob continues to say "we recommend a dollar-cost-average approach for new money, especially during periods of market weakness."  He doesn't define what market weakness is and given we have not had a market decline over 8% since early 2016, you have to wonder why not jump in right away or be more definitive.

See below for my advice for new money:


Kirk Lindstrom's Investment Letter
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Recently a reader send me this question about investing a "large sum of money."
I’m listening to Brinker right now. He just had a woman call in telling him she had a large sum of money and gave Bob a variety of ways to invest it in the market asked Bob which was the best way to go. Bob segwayed into asset allocation....and never did say which was the best way to invest a large sum of money in the market. 
Do you have a recommendation on the best way to invest a large sum of money in the market?
Here is my reply
If you don't mind, I'll use your EXCELLENT question for a short blog post and share my reply.  
Statistics show lump sum is best as many (perhaps thousands) listen to Brinker and think they should DCA on "weakness" so they never get in until a market top.   
IF you have the discipline to do monthly DCA into the funds I recommend in my newsletter,  you can have Vanguard set it up for you automatically since all my funds are at Vanguard with ETF equivalents you can buy anywhere, then do the DCA following the plan listed on pg 35 or my September newsletter near the bottom. 
As for asset allocation, I like being aggressive with money I made and saved while working but for inherited money, I like to keep the memory of who gave it to you alive so I recommend that go into my "Core Conservative" portfolio. 
Brinker is far too careful to make sure he doesn't give any advice that someone can say was "wrong" with market timing and cares less about helping people.   Think of all the years he's said to " DCA on "weakness" and the market has pretty much gone straight up!  You can see from my advice on pg 34 of my newsletter that I have a SIMPLE PLAN to accelerate DCA payments if the market corrects.  It is one reason I lost respect for Brinker.

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