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Re: Good move or Bad move??
Old 07-01-2005, 05:47 AM   #21
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Re: Good move or Bad move??

Quote:
Originally Posted by ben
Like Laurence I just love re-balancing! Maybe I am a bit of a masocist but selling (some of) the winners to fill up the losers is truely a nice experience for me.

My biggest challenge is WHEN/how often to re-balance. Leaving taxes out of the equation(as we are all different there) I am well aware that studies out there indicate one should only re-balance every 2-3 years - and that most probably do it once a year. Meanwhile if one is with a low cost online broker and the trades are big enough - it might reduce volatility to re-balance even more. In FIRE I do not mind giving up a bit of return for insurance.

I lean towards something like an asset class being 10% out of whack - e.g. a 500k total portfolio evenly in 5 different asset classes. When one asset class is at 110k, another at 90k I re-balance. It gets more complicated when returns vary more between the asset classes - so I have not yet put my re-balancing plan on paper - but I want it to be mechanical and simple for me not to linger when criterias are fullfilled.
Cheers!
I can actually understand this (rebalancing) just like I understand unclemick's "hobby stocks". I don't do it but I get it. Guess I am in
"Norwegian widow" mode

JG
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Re: Good move or Bad move??
Old 07-01-2005, 06:04 AM   #22
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Re: Good move or Bad move??

Quote:
Originally Posted by JPatrick
Time horizon is quite long.
Important to note that these changes cost me nadda in transaction costs or in taxes. The possible cost is in missed opportunity if the market proceeds to go up sooner than I think it will, but I've already said that I feel the real missed opportunity would be in not getting out for a while.
Important to note that you are incorrect about it not costing you anything. Trading costs are like an iceberg, the part you see (above the water) is small compared to the total costs. You just have other shareholders to help pick it up for you.

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Re: Good move or Bad move??
Old 07-01-2005, 08:59 AM   #23
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Re: Good move or Bad move??

I think most would agree we are in a cyclical bull market within a secular bear. The downside will be bloody ... when is anybody's quess. That's why I am in real estate with 75% of my wad. That has a different set of "worries".
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Re: Good move or Bad move??
Old 07-01-2005, 10:06 AM   #24
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Re: Good move or Bad move??

Quote:
You just have other shareholders to help pick it up for you
Another proof of inefficient markets - find and exploit those inefficiencies and you'll profit.*
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Re: Good move or Bad move??
Old 07-01-2005, 11:04 AM   #25
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Re: Good move or Bad move??

Quote:
Originally Posted by saluki9
Important to note that you are incorrect about it not costing you anything.* Trading costs are like an iceberg, the part you see (above the water) is small compared to the total costs.* You just have other shareholders to help pick it up for you.

You can look at it that way, but it would take one hell of a magnifying glass to find it on the bottom line of the 150K transaction I made.* Fact is, it would have cost me to stay in the fund and do nothing.
I suppose it is like getting into Yellowstone Park for free.* It was free, but oops, my taxes paid for the place.
There really isn't any free lunch, but some coupons are better than others.
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Re: Good move or Bad move??
Old 07-01-2005, 11:38 AM   #26
 
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Re: Good move or Bad move??

Quote:
Originally Posted by tryan
I think most would agree we are in a cyclical bull market within a secular bear.* The downside will be bloody ... when is anybody's quess.* That's why I am in real estate with 75% of my wad.* That has a different set of "worries".

Here is the Dow for the last 75 years or so.* If you know the cycle we're at, you are better at investing than me. That's why I don't try to time the market.


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Re: Good move or Bad move??
Old 07-01-2005, 12:57 PM   #27
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Re: Good move or Bad move??

Quote:
Originally Posted by Cut-Throat

Here is the Dow for the last 75 years or so.* If you know the cycle we're at, you are better at investing than me. That's why I don't try to time the market.


At a glance that chart says - -wow buy and hold the dow for a long time and you can't miss.* That is until you think about the 1929 crash. Those that were able to stay in the market only had to wait until 1954 to see the DOW recover to the 1929 high.* Look at some of those years during the 65 - 80 time frame.
I wasn't around in the 20's, but I'm told that the precrash signs were pretty clear.* Can you say greed?* I was around for the recent tech bubble and the signs were very clear especially near the end, still many stayed the course til the bottom.* Yes, I think you can figure out roughly where we are in a particular cycle.* The age old problem for individual investors has been and continues to be buying high and selling low which has nothing to do with charts, but pure emotion.
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Re: Good move or Bad move??
Old 07-01-2005, 01:13 PM   #28
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Re: Good move or Bad move??

Quote:
Originally Posted by HaHa
Malakito-A long time ago my wife was in Pisa, sitting in an outdoor cafe. Two middle-aged couples from Texas were seated at a nearby table. One lady was trying to convinnce her friend to do some more sightseeing with her, as the two husbands were definitely done for the day.

The lady who wanted to go sightseeing said "Come on, there is so much to see here." Her friend replied, "Honey, I seen the thang leanin', and that's enough for me."

Well, I seen the thang leanin' too.

ha
HaHa,

Sorry, I must be particularly dense. I don't get what you are saying, and since you've engaged in respectful dialogue on the subject, I figure it's worth asking: Would you make your point plainly? Thanks.

malakito
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Re: Good move or Bad move??
Old 07-01-2005, 01:35 PM   #29
 
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Re: Good move or Bad move??

Quote:
Yes, I think you can figure out roughly where we are in a particular cycle.
OK, tell us where we're at? -Most of your post you told us what happended in the past? - We all can do that!
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Re: Good move or Bad move??
Old 07-01-2005, 01:50 PM   #30
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Re: Good move or Bad move??

Quote:
Originally Posted by JPatrick
In a few minutes I will have liquidated about 50% of my IRA.* Selling a variety of mutual funds with the biggest chunk from an S&P 500 index fund.* Most of this to sit in a MM account for the time being, while some goes into oil and oil service.
My thought process- - I think the next few weeks o even until after Labor Day could be tough sledding due to the Feds action, oil prices, terror/war, 2nd qtr downers and on and on.
On the other hand oil still looks good for now and seems to be about the only investment I want to hold over long weekends.
For the cash I have raised I'm looking at putting it in my high yield funds.

Good Move or Otherwise?
Cut throat/
My post tells you what I did yesterday and why I thought that was the right move (for me). Keep in mind, I don't plan to put that cash under the sealy posturepedic, I think I can find a way to beat the overall market for a few weeks. I said I bought more oil and I probably should have bought even more. My vanguard high yield pays about 7%. Another possibility for a few weeks. Remember, what I sold most of was the 500 index and beating that lately has not been much of a challenge.
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Re: Good move or Bad move??
Old 07-01-2005, 02:49 PM   #31
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Re: Good move or Bad move??

Years ago Ben Graham said if you are uninterested in investing, don't want to do the work, and have no particular talent for it, buy a diversified list of blue chip stocks and AAA bonds and sit tight.

OTOH, if this does not describe you, it's a free country, give it a try.

Ha
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Re: Good move or Bad move??
Old 07-01-2005, 02:52 PM   #32
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Re: Good move or Bad move??

Quote:
Originally Posted by malakito
HaHa,

Sorry, I must be particularly dense.* I don't get what you are saying, and since you've engaged in respectful dialogue on the subject, I figure it's worth asking:* Would you make your point plainly?* Thanks.

malakito
malakito,
I don't explain jokes either. I have been studying UncleMick's oracular posts, so I thought I would try some for myself. It's like a koan- maybe it means something, maybe not.

Ha
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Re: Good move or Bad move??
Old 07-01-2005, 03:12 PM   #33
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Re: Good move or Bad move??

Quote:
Originally Posted by JPatrick
In a few minutes I will have liquidated about 50% of my IRA.* Selling a variety of mutual funds with the biggest chunk from an S&P 500 index fund.* Most of this to sit in a MM account for the time being, while some goes into oil and oil service.
My thought process- - I think the next few weeks o even until after Labor Day could be tough sledding due to the Feds action, oil prices, terror/war, 2nd qtr downers and on and on.
On the other hand oil still looks good for now and seems to be about the only investment I want to hold over long weekends.
For the cash I have raised I'm looking at putting it in my high yield funds.

Good Move or Otherwise?
I did this about 2 weeks ago. So far, I have been very happy with my decision...... now i'm just looking for the right time to hop back into the market. Not yet though....
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Re: Good move or Bad move??
Old 07-01-2005, 03:19 PM   #34
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Re: Good move or Bad move??

Quote:
Originally Posted by HaHa
malakito,
I don't explain jokes either. I have been studying UncleMick's oracular posts, so I thought I would try some for myself. It's like a koan- maybe it means something, maybe not.

Ha
Fair enough. Interesting you mention unclemick. I've always felt like he's saying something important but at least half the time I can't understand him either.

malakito.
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Re: Good move or Bad move??
Old 07-01-2005, 03:59 PM   #35
 
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Re: Good move or Bad move??

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Would you make your point plainly?
The leaning tower of Pisa is a metaphor for the relationship betweeen Keynesian economics and the Wydoff variant of efficient market theory.
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Re: Good move or Bad move??
Old 07-01-2005, 04:25 PM   #36
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Re: Good move or Bad move??

Quote:
Originally Posted by TromboneAl
The leaning tower of Pisa is a metaphor for the relationship betweeen Keynesian economics and the Wydoff variant of efficient market theory.
Thank you, Al. I couldn't have said it more clearly.

Ha
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Re: Good move or Bad move??
Old 07-01-2005, 05:27 PM   #37
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Re: Good move or Bad move??

How about pictorially?
Attached Images
File Type: jpg pisa with pizza.JPG (3.4 KB, 82 views)
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Re: Good move or Bad move??
Old 07-01-2005, 06:09 PM   #38
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Re: Good move or Bad move??

Quote:
Originally Posted by malakito
Fair enough. Interesting you mention unclemick. I've always felt like he's saying something important but at least half the time I can't understand him either.

malakito.
I think Unclemick is drinking a lot of Community Coffee and Chicory. Anyway, he's the Alan Greenspan on the forum. Unclemickspeak will be dissected for years. Heh heh heh!
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Re: Good move or Bad move??
Old 07-01-2005, 06:53 PM   #39
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Re: Good move or Bad move??

I have three women - SO, 88 yr old mom, and step daughter in spare room who make similar statements.

Now that I'm older - the neighbors no longer whisper - "What's wrong with that boy?"

I thought being a left handed, INTJ, en-ga-neer was self explanatory.
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Re: Good move or Bad move??
Old 07-01-2005, 08:13 PM   #40
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Re: Good move or Bad move??

My answer: Most new money is going to cash, as are divvies. Sold a little gold today, too, to rebalance slightly - just in time for Fortune to opine about $500 gold. I don't want to sell much; gonna stick with slice/dice. But I want some cash for bargain-hunting, when the time is right.
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