New Risk Flags Hit, but does it matter?

I read several blogs on a weekly basis.  Here are some I look at if you are interested.

http://www.mojena.com/

http://www.ritholtz.com/blog/2011/05/two-red-flags-russell-and-the-hang-seng/

http://efficientish.blogspot.com/

http://www.hussmanfunds.com/wmc/wmc110516.htm

3 of the 4 here are flagging that risk has increased and they are taking their necessary precautions.  It is all interesting (to me), but what if they are wrong?  What if they are right?

Here is the how their thought process and my thought process differs.

1.  They are timing they market and I am timing your life based on the fact that we are dealing with two moving targets:  your life and the markets.

2.  If you have too much risk now for what you want out of life, you may have to take an uncomfortable amount of risk later.  If you have too little risk now, you necessarily will have to take an uncomfortable amount of risk later.  Right-sizing your risk regardless of where the market is or isn't is the appropriate thing to do.

3. If you are comfortable with the amount of risk in the market, and buy into the market based on headlines, you are necessarily creating and placing more risk into the market.  Conversely, if you have a roadmap of how you are investing into the market (IRA contributions for you in January, April, July, and October;  IRA contributions for your wife in February, May, August, and November;  extra spending money for spring break, summer vacation, back to school shopping and Christmas is my favorite plan), then you are likely buying at a discount 50% of the time and at a premium 50% of the time and not worrying unnecessarily about it.

4.  You deserve to have as little risk as necessary so you can have as many memories as possible.  Don't let exposure to an abrupt change in the market create a situation where you have more risk and fewer memories.

My goal is to change the complex world of investing into simple lifestyle solutions.  I want to individualize, humanize and customize your plan so that we address your hopes, fears, and motivations because nobody knows what is better for you that you.  Let me help you down that path.  If it's time to downsize your risk to preserve those future experiences, then let's work on it together for your assets held with me and those that are held in other places (401k, etc.), and let's figure out how we can do it in a cost and tax efficient manner.