No. of Recommendations: 5
Back in 2008, we anticipated a big crash and decided to get out of the markets. We ended up losing about 20% instead of 40%, so we kinda felt good about that. We've pretty much stayed out since then with the bulk of that money. BUT now that the markets have come back,

That's the problem with people who invest by seat-of-pants instead of having a solid plan. They maybe know when to get out --- but only after their emotions keep them awake all night, and after they've taken a goodly loss. But they don't know when to get back in, so they've locked in their losses and missed out on the subsequent gains.

Here's a couple of links to get you started.
Faber's Paper "The ultimate buy-and-hold strategy"

Start here and read every post from the last several years.

We are just feeling nervous about investing, due to things like the Europe situation, reading things about the whole economic system possibly collapsing, hyperinflation, etc. Lots of possible doom and gloom!
Hearken to the words of Ken Fisher. "The market takes into account all known information." All the horrible news you mentioned is well-known and widely-known, therefore it is already baked in. So you can ignore all that stuff.

I've done some research and found some mutual funds that have done well.
Unfortunately, this pretty much is the rallying cry of the bad investor. You've found some funds that did well in the prior market conditions. IOW, they are fine-tuned for a crappy market. Which means that they are likely to do very poorly in the upcoming bull market.

I am familiar with the conventional wisdom about investing. I am just finding it hard to follow it right now.
Well, that's good and bad. I'm just not sure which is the good part and which is the bad part. ;-)
By conventional wisdom, do you mean Money Magazine & Smartmoney and the like? If so, then it's bad.
By not following it, do you mean that you aren't buying the Ten Best Funds For The Next Five Years in articles in those magazines? If so, then it's good.
Ha! Are you getting dizzy yet? Good things are bad and bad things are good---WTF??
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