"Hot Stock" Talk

Obviously, the market fluctuates a lot.  I'm always working hard to ensure I don't get caught up in the "hot stock" or "hot fund" talk.  I'm always reminding myself that Asset Allocation is the key to sound returns over the long-haul, not market timing.  I decided to go back to 2002 and track my return at the end of each month through to the present.  From the chart below, one can see that things have been good lately.  But, the main reason I'm achieving such good results now is because I was buying up funds when they were really low back in 2001 and 2002.

There will be times that my results dip way down, but over the long-term, my goal is to achieve a 10% return on my investments.  As of today, I'm sitting at a return of 20.89%.  Very positive right now, but the real test will be how I handle a valley.  We should all consider low times as an opportunity for buying more.  With things good right now, I think I'll scale back on putting cash into equities right now.  2006 will be an opportunity to stockpile cash such that I'll have investable liquid assets for pumping into the stock market when it inevitably goes down in the future.