Investment Strategy For This Year

Hello 2006 !!!

My investment strategy for this year is to not buy equities and to store as much cash as possible.

The factors that have led to this shift in my approach...( 1 ) The investment vehicles that I've been pumping my money into over the last several years are at pretty high levels and I don't want to continue to buy high right now ( 2 ) With Dayna not working at the present time, our marginal tax rate will fall to 15% ( 3 ) Only contribute the minimum 4% to my 401K in order to maintain the 2% company match

Preserving cash right now may also be helpful in order to handle the new expense category "Baby Karas".  I also thought long and hard about reducing my 401K contributions.  After crunching all the numbers and going on the assumption that our current marginal tax rate of 15% will most likely be the same rate during our retirement years, it was just a matter of determining whether or not I wanted to pay the tax man now in 2006 or wait until my retirement years.  The important thing here is that I ensure that I continue to take advantage of the matching company funds ( which I am since I'm still contributing the minimum 4% instead of the 21% I contributed last year ).

So, hopefully, as the cash accumulates this year, I look forward to a possible opportunity to invest in some instrument at the end of the year that may be at low levels.  I was fortunate enough last year to find the Vanguard Primecap Core Fund at $10.18 only to see it rise to $11.41 by year end.  Purchasing a thousand shares of that last March has given me a nice return on my investment in just nine months.

Happy New Year !!!