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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-24-2006, 04:11 PM   #101
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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The worst thing on earth you can do is add up all the fears and negatives and beat yourself into a losing strategy as a result.
I disagree big time!

A sharp stick in the eye is the worst thing on earth.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-24-2006, 06:17 PM   #102
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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I disagree big time!

A sharp stick in the eye is the worst thing on earth.
What about two sharp sticks? One in each eye? :P
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-24-2006, 06:30 PM   #103
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Have you ever actually had a sharp stick in the eye? Might feel good. Ya never know. Could be blissful to scratch the itch on the back of the eye socket for a while.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-24-2006, 06:34 PM   #104
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Well now heres a fun question for the "But I *did* lose money when the market went down!" folks.

If the stock market goes up, did you lose money on all the investments that werent in the stock market?

I'm up 13.3% in the past year. Someone in cash might have pulled off 6% with a strong wind and downhill. If you were in cash, did you lose 7.3%?

Haaa HA!
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-24-2006, 06:48 PM   #105
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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Originally Posted by Cute 'n' Fuzzy Bunny
Well now heres a fun question for the "But I *did* lose money when the market went down!" folks.

If the stock market goes up, did you lose money on all the investments that werent in the stock market?

I'm up 13.3% in the past year.* Someone in cash might have pulled off 6% with a strong wind and downhill.* If you were in cash, did you lose 7.3%?

Haaa HA!
Yeah. I lost a million dollars last week. Pork bellies went up and I didn't have all my money in them.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-25-2006, 07:16 AM   #106
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

everything in the financial world is a comparison to something else.the saying is if your not making money your loosing money..
my benchmark is the money market or cd i could have been in...if im above that for the year then im happy...if my funds are up 2 or 3% for the year then i consider that a loss if money markets pay 4.5%..another example is if i bail out of a stock to early leaving to much in gains on the table.although its not a countable loss i still feel mentally i lost the extra money i could have made had i not bailed so early
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-25-2006, 07:25 AM   #107
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

a short term position in the market is not investing its speculating.time makes most fund choices okay.while the same may not be true for individual stocks ..as we all know we cant predict market short term moves.oooh we all tried be it moving averages,trend lines,skirt hems or the good ole crystal ball and we may even have hit it lucky once or twice ...the reality is historically the market is up 67% of the time and down 33%....thats good enough odds for me long term.....you would be hard pressed to find a 10 year period where the returns didnt exceed a bank account or money market...oooh yea we can find a rare exception in time where it may not be true but for the most part the law of averages says it works out to be in the market long term time and time again.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-25-2006, 07:57 AM   #108
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

another thing i want to add is my system for dealing with the dips...we have 3 seperate portfolios running depending when we may tap the money.....a short term 1-3 years ,,,a medium term 3-6 years and a long term looking out about 6yrs and more......the 1-3 is mostly cash, cd,short term bond,,,,the medium is growth and income funds and bonds,,,the long term is aggressivly invested just like when i was 20 yrs old as its money we wont need for years,,,the dips never bother us this way
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-25-2006, 08:12 AM   #109
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

107, you are just practising asset Allocation, but I would lump them into one portfolio, then do a % thing.

I like ETF's(or Holders or Vipers, whatever), an easy way to slice and dice, whether it be Bonds, stocks, or Commodities.

I have 10% income Trusts, 10% High Yield Bonds to add to ca$h flow.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-25-2006, 10:42 AM   #110
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

while its true you can make 1 portfolio and achieve the end result i find its way easier to track and set up different mixes with different goals and time frames..in my case i follow the fidelity monitor newsletter for my short and medium portfolio's and fidelity insight for my long term..its kind of like having 3 different buckets but all i have to make sure is i have 2-3 years worth of income in my short term bucket....i find it simple as well as not keeping me locked just into a 60/40 or 50/50 mix of funds as i otherwise would do if it was just 1 portfolio.my aggressive long term money is still fun to invest just as it was 20 years ago...
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-25-2006, 12:06 PM   #111
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

Okay, I give up. All y'all feel bad every day the market goes down. You lost. Its gone. Never to return.

I suppose if most investors didnt run fleeing when the market started to tank, it wouldnt turn out to be such a good buying opportunity for people who see discounts as buying opportunities. My thanks for that.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-26-2006, 09:47 AM   #112
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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Originally Posted by Cute 'n' Fuzzy Bunny
Come on, lets not get into weak semantics, but when rebalancing, i'm not buying lost assets with found money. I'm using appreciated assets to buy more depreciated assets.
unless everything went down, in which case you are taking the stuff that didn't go down quite as much, selling it, and buying the stuff that REALLY tanked. And steadfastly insisting you haven't lost any money....

it always amuses me that the same people that rebalance insist that they don't practice market timing. C'mon....rebalancing is a form of timing. It's an attempt to react to market conditions by selling high and buying low (or sell low and buy lower, as above).
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-26-2006, 10:01 AM   #113
 
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

No matter how thinly you slice it, it's still baloney.

Point is that no matter how you think of your money (different buckets, emergency cash, medium term, etc.) you in fact only have one bucket, and if you don't evaluate your asset allocation for that one bucket, you are fooling yourself.

-----------------

If you rebalance to restore your target asset allocation every Jan 2, I can't see that as market timing. In fact, if you can call rebalancing market timing, you could also call failing to rebalance market timing (that is, following the winners by letting the allocation in the good performing funds grow).
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-26-2006, 11:07 AM   #114
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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. . . it always amuses me that the same people that rebalance insist that they don't practice market timing.* C'mon....rebalancing is a form of timing.* It's an attempt to react to market conditions by selling high and buying low (or sell low and buy lower, as above).
Despite a lot of financial planning dogma to the contrary, there is not typically a rebalancing bonus. Rebalancing is more likely to reduce return than increase them. If you don't believe that, you can prove it with FIRECalc. Run 3 simulations: 1) $1M 50/50 stock/bond portfolio for 30 years, no withdrawals, default everything else. 2) $500K all stock portfolio for 30 years, no withdrawals, default everything else. 3) $500K all bond portfolio for 30 years, no withdrawals, default everything else. Now sum the results after year 30 of 2) and 3) and compare to 1). The sum of 2) and 3) represents an unbalanced $500K portfolio and it will be greater (significantly greater) than the re-balanced portfolio on average and in about 60% of the individual 30 year sequences.

Why rebalance? . . . To maintain an acceptable risk. At the end of 30 years, the unbalanced portfolio will also be about 75% stock 25% bond on average. This is far more risky than the 50/50 portfolio. You rebalance for risk mitigation, not to time the market in a way that pays a premium.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-26-2006, 11:47 AM   #115
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

I solve that by not rebalancing. Target retirement baby. Now if they'll just stop changing the allocations on me... :P
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-26-2006, 12:57 PM   #116
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

i find rebalancing every 2 years is better...a trend usually lasts longer than a year and the wait usually adds a tad more return from a good up trend.........
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 03-26-2006, 03:41 PM   #117
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

I wouldn't go so far as to say that rebalancing is market timing. Not any more than reinvesting dividends or dollar cost averaging paycheck withdrawls during accumulation is market timing.

Market timing to me means changing your exposure to the market (or some segment of the market). Rebalancing, reinvesting, and DCA'ing are all techniques that help maintain the same exposure to all segments of the market. Yes they can sometimes help you buy more when prices are low and less when prices are high, but that is not market timing because the goal is always to move towards balance, not to make the position more extreme.
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!
Old 05-10-2006, 03:46 AM   #118
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Re: How do you tolerate the Peaks and Vallies? I'm having a hard time!

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I wouldn't go so far as to say that rebalancing is market timing.* *Not any more than reinvesting dividends or dollar cost averaging paycheck withdrawls during accumulation is market timing.*

Market timing to me means changing your exposure to the market (or some segment of the market).* Rebalancing, reinvesting, and DCA'ing are all techniques that help maintain the same exposure to all segments of the market.* Yes they can sometimes help you buy more when prices are low and less when prices are high, but that is not market timing because the goal is always to move towards balance, not to make the position more extreme.
depends when and how ofton re-balancing is done...if a portfolio is re-balanced every year on the same date regardless of market action id call that risk balancing...if one re-balances based on market run up or drop and not just date driven than thats market timing...your trying to time your move before the big drop.....like dollar cost averaging.putting money in the same time regardless of market action is just that,dollar cost averaging..trying to get the money in after a drop and not wait for a given date,thats market timing
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