There’s been a great deal of chatter recently about the Dow hovering around the 13,000 mark. Aside from the buzz we’ve been hearing all over the national media outlets, I personally think the lesson learned from my brief run-in with a one “Mrs. Handleman” can teach us more about the markets than all the noise we’ve been hearing out there.

Sitting in my office after hours the other day, a woman by the (slightly modified) name of “Mrs. Handleman” called in and I happened to pick up the phone. She read a column of mine several months back and called to inform me she was ready to get into the market. I asked her “why,” she responded “everyone is making so much money” and as a result, she tracked me down to get a few good stock tips.

Aside from the fact that Mrs. Handleman later told me she was in her mid-80s and I felt a handful of quality bonds would do her better justice, her comment was the exact reason why one should not get into the markets.

Good, solid and prudent investing recognizes there is never a “right” or “wrong” time to “get into the market,” especially when chasing returns. The only exception to this “rule” is if you were looking to gamble your money, and most people I know are not looking to gamble their money, they are looking to invest it.

If you want to gamble your money, do it with only a small portion of your money. And as crazy as the following may sound, you might want to let a few randomly thrown darts or a monkey named “Leonard” do the stock picking for you. Think I’m joking? Not quite. For those of you that never heard of Leonard before, be sure to check out Cramer Watch. It’s a site that tracks Leonard’s random, aimless stock picks against those of Jim Cramer’s from the popular CNBC show, “Mad Money.”

Guess whose picks are making more money? ….You guessed it…. The Monkey’s. And what about those darts? A reporter from the Wall Street Journal has been throwing them at a dartboard year after year, comparing their performance against some of the brightest minds out there. I’m sure you can guess who’s winning that contest as well.

I’m not saying guys like Cramer are not smart people. Quite the contrary, when it comes to picking stocks, love him or dislike him, I personally consider him exceptionally bright. But when it comes to achieving sustained and consistent success in the markets, picking individual stocks to get the job done is a pretty tough undertaking.

After all, there are thousands and thousands of mutual funds in the country. With that comes an equal amount of professional fund managers doing the best job they can to “beat the market” by picking individual stocks to outperform the specific “index” their returns are benchmarked to.

Out of all those fund managers, only one has successfully outperformed the static, mindless Standard and Poor’s 500 index more than 10 years in a row: the legendary Bill Miller from Legg Mason who’s extraordinary streak just recently ended.

Therefore, the only way to win the game is to first admit that extraordinarily rare exception aside, very few people can consistently “beat the market.” And by “beat the market” I specifically refer to “having the ability to handpick individual stocks that will outperform an index of stocks such as the Dow, Standard and Poor’s 500 or Nasdaq 100.”

With this humbling reality in mind, as soon as someone admits that with rare exception few people ever consistently “beat the market,” the next logical question might be, “OK, smart guy, that’s fine. But then what’s the answer to making money in the markets?”

The answer is a lot simpler than you may think: to beat the market, one needs to “be the market.” And to do that, all one needs to do is invest in static, low fee and tax efficient indexes to get the job done; indexes such as the S&P 500 and a long list of many others available out there. Using in an index to represent each fundamental asset class found within a well diversified investment portfolio means that you’ll have a far better chance to accomplish what very few of the professionals out there can do: generate consistent, reliable and rewarding returns.

Although there are certainly no guarantees in any market investment that success will be achieved, the statistics clearly show that time and time again investing in the indexes provides you with the greatest chances of sustained, consistent and rewarding success. As for statistics, here’s two recent examples:

• A low-cost index fund will always outperform the collective performance of active investors in the same market sector. Last year, a majority of funds failed to beat their benchmark index in eight of the nine categories. The five-year results are equally bad, with funds again striking out in eight of the nine categories. Wall Street Journal, January 12, 2006

• Only 19% of all actively managed funds beat the Standard & Poor’s-500 stock index in 2006. Wall Street Journal, December 29, 2006

So, if you care to gamble your money by hand picking a few individual stocks, you may want to give Leonard a try. And if he doesn’t work out, give Mrs. Handleman a call. My guess is she didn’t take my advice and wound up taking her money somewhere else.

But if you care to invest, recognize there is never a “good” or “bad” time to get into the market, regardless what the Dow is doing. A solid, well diversified investment portfolio covering the fundamental asset classes represented by indexes takes much of the guesswork out of investing. With this timeless strategy in hand, you’ll typically have the greatest chances of sustained and consistent investment success regardless of what the Dow is busy doing.

13,000, 10,000 or 9,000 – with a well balanced and diversified portfolio of indexes in hand, it’s always the right time to be in the market when you are the market.

Welcome to my Blog – Where the Worlds of Investment Advice and Retirement Planning Collide in an entertaining, unique format!

I have created this blog so that I can open a dialogue with my readers, clients and people interested in straight, honest and objective investment insights. This blog will serve as the primary place to update all of my current activities as well as provide retirement and investment planning insights for my clients and the world at large.

For the past year I have been working on my upcoming book “You Can Never Be Too Rich… essential investment advice you cannot afford to overlook” and I am eagerly anticipating the upcoming release of it in the fall of 2007 (Wiley & Sons Publishers). As such, I will be sharing previews and excerpts of this labor of love over the next few weeks, right here on my new blog. Stay tuned for exciting and insightful investment advice in 2007 and beyond, and feel free to get in touch at any time!