Going to 100% cash

[Nords]

This is actually a pretty negative thread. It’s either I’m getting out completely or I’m holding based on methodology and discipline. No positive forward looking views?

"The dividend yield on my stock ETFs just keeps getting higher!!"

 

[rescueme]

No positive forward looking views?

In 100 years, it won't matter ...

 

[HFWR]

"The dividend yield on my stock ETFs just keeps getting higher!!"

Pretty soon, it'll reach infinity...

 

[MichaelB]

"The dividend yield on my stock ETFs just keeps getting higher!!"

Good one. And it's almost high enough to start buying again...

 

[M Paquette]

A quick google search shows that most "experts" are ofthe view that rebalancing is a form of market timing.

I do my market timing every January, when I check to see if my asset allocations are off target by more than 25% of the target allocation. I used to do my market timing every 18 months, when dinosaurs roamed the earth, and the long term capital gains holding period was 18 months.

I actually have to move assets around maybe once every 3-4 years. Last time was in January 2009. This January some things were near the edge of the bands, but not far enough to require action.

Edit: I should note that my goal in this exercise is not to 'beat the market', but rather to maintain an acceptable risk level in accordance with my Investment Policy Statement.

 

[RunningBum]

I started a poll on the AA = market timing question.

 

[Bimmerbill]

I'm still in the market, about 80% stocks. Probably 15 to 20 years until I draw my retirement. But, I have several vested pensions, with COLAs, to anchor me. Unless the masses rise up and take the pensions away.

 

[fritz]

Here's a little different view. Bob Doll at BlackRock hasn't moved off his 2010 annual forecast yet. As for getting it right - even computer guided Quant funds have so far failed - apparently they are logical, but the market isn't....

Here's another little bright spot - "tax free gains" compliments of the Republicans (if you can believe that one). Just have to qualify, and be able to pull it off by the end of this year (set to expire)......

 

[haha]

Here's another little bright spot - "tax free gains" compliments of the Republicans (if you can believe that one). Just have to qualify, and be able to pull it off by the end of this year (set to expire)......

I'm so poor I can hardly scrape together the money for a nice dinner date, but still this would not help me.

Ha

 

[rescueme]

I'm so poor...

Lies are not permitted on this forum ...

 

[fritz]

I'm so poor I can hardly scrape together the money for a nice dinner date, but still this would not help me.

Ha

I don't know Ha - with a little careful manipulation a lot of folks could pocket some tax free capital gains. Given the fact that this relatively unknown tax break actually exists - some will get it and won't even know they did, until tax time......

But hey, its' your money..

 

[Meadbh]

My financial advisor recently told me she has inherited some clients who insisted on getting out of stocks in 2008 (sell low) and now want to get back in (buy high(er)). She is having difficulty getting through to them that if they couldn't sleep at night then, they have no business adding risk now. I said: send them over to me!

I believe in diversification. I can handle my equities going up and down like a yo-yo, if I see my gold and CDs/GICs going up (think tortoise vs. hare). Throughout this whole debacle I have not sold equities. It is true that my appetite for capital preservation has increased while my greed for yield has moderated. I am fortunate to be still w*rking while learning this. So I am putting new investments into cash equivalents such as CDs/GIC ladders, for safety and relative liquidity. I'm getting 3.75% for my 5 year GICs. Right now I have about 38% of NW in equities and the percentage is falling passively as I diversify. But I will stay in equities for long term growth.

 

[rescueme]

My financial advisor - I believe in diversification.

Sorry; if you have a "belief", why do you have an advisor?

Just asking....

 

[dex]

Sold remaining positions today into another asset - cash. I will then re-balance into other asset classes into my preferred Asset Allocation.

None of this is market timing -just slow motion Asset Allocation re-balancing.

 

[rescueme]

None of this is market timing -just slow motion Asset Allocation re-balancing.

Rebalancing is done, regardless of the current/perceived market, according to a pre-stated and documented plan.

Market timing is done in anticipation of a change in the market, based upon current/expected changes.

So what exactly are you doing?

I'm confused (but willing to learn )...

 

[Dawg52]

Sold remaining positions today into another asset - cash.

Hey, an up day. Thanks Dex.

 

[dex]

Rebalancing is done, regardless of the current/perceived market, according to a pre-stated and documented plan.

Market timing is done in anticipation of a change in the market, based upon current/expected changes.

So what exactly are you doing?

I'm confused (but willing to learn )...

humor

 

[Sparty]

If he's going to cash there will not be much interest!

 

[dex]

Hey, an up day. Thanks Dex.

Tomorrow might be an up day - then again an unemployment report comes out tomorrow.

 

[Coderguy]

Tomorrow might be an up day - then again an unemployment report comes out tomorrow.

Can economic information that is moving this 'fast' really work? And if bad news means get out; aren't we chasing the market? Isn't that bad?

Oh, and the whole AA market timing thing. You can put me in the camp that it is not market timing; because it removes the dirty word - speculation. Risk is a known factor; not speculation. At a regular interval; you adjust your portfolio back to your risk level (as previously stated). The timing, market state, and future market state aren't of concern. Your AA shifts as you get older. If you are shifting it due to a 'market indicator', you are back to speculating and yes; timing the market.

Poor horse...

 

[Hamlet]

I am extremely positive on the stock market right now.

Most of the big multinational companies I own are making very solid profits and are priced extremely reasonably.

Sure, the economy is kinda sucky and is likely to stay that way for quite some time. However, if you would have told me in March of 2009 that this is where we would be, I would have been thrilled.

We're now afraid of a double dip recession, but that's a pretty "normal" fear. In March of 2009 they were talking about a complete collapse of the financial system.

Now we're just slogging through the same kinda suck we've faced a whole bunch of times in the past. We may go back into recession for a while. It may take 5 years to get jobs really growing again.

But at the end of the day, I'm going to go to the bank and my cash card will work. I will use money to buy goods and services from various companies, and the company I work for will continue to pay me for my efforts.

The world isn't ending.

Given that, I think I will take the dividend yield of companies that appear to be growing their earnings over no yield in cash or a tiny yield in long-term bonds that will get destroyed if we catch a whiff of inflation.

This is actually a pretty negative thread. It’s either I’m getting out completely or I’m holding based on methodology and discipline. No positive forward looking views?

 

[DoubleDown]

Dex - have you ever considered investing in PRPFX so you wouldn't have to worry about if we are in inflation, deflation, etc.? Either that fund, or do Harry Browne's 4 x 25 (do a google search if you are unfamiliar with it). It's never wrong to take profits. Good luck to you.

 

[ls99]

I'm so poor I can hardly scrape together the money for a nice dinner date, but still this would not help me.

Ha

Would that be a nice date for dinner or a nice outing for dinner?

 

[dex]

Dex - have you ever considered investing in PRPFX so you wouldn't have to worry about if we are in inflation, deflation, etc.? Either that fund, or do Harry Browne's 4 x 25 (do a google search if you are unfamiliar with it). It's never wrong to take profits. Good luck to you.

Thanks, that does look like it could be a core holding that fits me.
Do you own it?

6.7B fund -

PRPFX: Summary for PERMANENT PT- Yahoo! Finance

Bogleheads :: View topic - Updated Modification of Harry Browne Permanent Portfolio

 

[clifp]

I am extremely positive on the stock market right now.

Most of the big multinational companies I own are making very solid profits and are priced extremely reasonably.

Sure, the economy is kinda sucky and is likely to stay that way for quite some time. However, if you would have told me in March of 2009 that this is where we would be, I would have been thrilled.

We're now afraid of a double dip recession, but that's a pretty "normal" fear. In March of 2009 they were talking about a complete collapse of the financial system.

Now we're just slogging through the same kinda suck we've faced a whole bunch of times in the past. We may go back into recession for a while. It may take 5 years to get jobs really growing again.

But at the end of the day, I'm going to go to the bank and my cash card will work. I will use money to buy goods and services from various companies, and the company I work for will continue to pay me for my efforts.

The world isn't ending.

Given that, I think I will take the dividend yield of companies that appear to be growing their earnings over no yield in cash or a tiny yield in long-term bonds that will get destroyed if we catch a whiff of inflation.

Other than being extremely positive (I'm slightly bullish) I complete agree.

Good companies are make very respectable profits. They are paying off expensive debt with cheap long term debt positioning themselves well for the future. (I read some are thinking of issuing 100 year bonds!!)

The strongest companies are sitting on tons of cash earning no interest and if they can't find suitable investments are starting to return some of it to share holders in the form of increased dividends and stock buy backs. This will help generate some demand and help propel stock prices upward.

The US and European economies do suck and IMO the politician and the pundits have pretty much run out of ideas on how to fix things.

That is the bad news the good news is that world is bigger than just the US and Europe. This last decade create roughly a billion new consumers in place like China, India, Brazil, and Russia. The BRIC nation are important part of the world economy and most of their economies are doing just fine.

Now it takes lot of Chinese consumers with an extra $100-$200 a month to spend beyond necessities to make up for an American consumer that has an extra thousand to spend, but they will eventually pull us out.