TODAY   |  January 26, 2013

With markets near record high, is now the time to invest?

With an improving global economy, and numbers on the markets at a five-year high, people who may be sitting on the sidelines are asking if they should take the investment plunge. “What you should always have is a diversified portfolio,” CNBC’s Mary Thompson tells TODAY’s Erica Hill.

Share This:

This content comes from Closed Captioning that was broadcast along with this program.

>>> if you have money invested in the stock market , you may be feeling little better this morning. the dow is approaching a record high. the other markets making big rallies, as well. the big question, of course, is now the time to invest, or did we already miss it? let's bring in cnbc's mary thompson. nice to see you. we're hoping we didn't miss it. if we look at the closing numbers, the dow , nasdaq, s&p, on a roll. the indices posting gains four weeks in a row. the dow and s&p reaching five-year highs on friday. is now the time to get in there and invest?

>> you know, there are a lot of reasons to say yes. first of all, let's look at the u.s. economy . we've seen improving numbers in the housing markets. better numbers on unemployment. then globally, we've seen improvements, as well. notably, better manufacturing numbers out of china and germany, two big economies. and so that's one reason. another reason is corporate balance sheets are very clean, they paid off a lot of debt. lastly, there's money on the sidelines to come in. that could fuel a rally. of course, there are cons because it's not always good news. the first one is, and i think you have to be concerned with this, the outlook for the u.s. fiscal picture. that could be a problem, especially going into march or february when we have the debate in washington. that could be a problem. also, profit growth. while it's up, the rate of growth is slowing a bit. and to some professionals, that's a concern.

>> those are things to look at. for a lot of people, they pulled back because they were concerned about their future and their retirement savings in many cases.

>> as they should be.

>> looking at this, based on your age, how does that factor in to whether or not you should invest and how involved you should be?

>> well, a general rule of thumb is the younger you are, the more money you have in stocks. what you should always have is a diversified portfolio. you should always have money in stocks, bonds, maybe commodities like gold, a smaller percentage, 5% to 10% at the most. if you're under 40, you should have the majority of money in stocks. that's what a financial adviser would tell you. as you go into the 40s, 50s, and 60s, you should transition away from stocks and put more money into fixed incomes like bonds and more money into cash to make sure you have that principle there when you retire.

>> you mentioned the fiscal outlook for the u.s. economy , what could be happening in the washington in the next month or so. that's a big concern for people. how much of an impact will that have in terms of how long this rally will last?

>> well, it could actually stall the rally. if there tends to be a lot of rancor and a lot of back and forth between democrats and republicans on how they should deal with the deficit and what kind of spending cuts should come out. that could actually cause some choppiness in the markets. however, if they get things settled, a lot of people say that would be a huge catalyst for the stock market .

>> and analysts had said, too, what we're seeing now this sort of rally if that's the right word for it, a lot of that came after we avoided the fiscal cliff.

>> that's right. an added catalyst. on top of all the positive economic data that we've been seeing.