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Keeping Powder Dry
Old 12-30-2012, 10:41 AM   #1
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Keeping Powder Dry

Dow futures are down 200+ points as of 10 am cst. Looks like we will be going over the cliff. I smell a buying opportunity and keeping my powder dry. Any thoughts?
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Old 12-30-2012, 10:59 AM   #2
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Dow futures are down 200+ points as of 10 am cst. Looks like we will be going over the cliff. I smell a buying opportunity and keeping my powder dry. Any thoughts?
I keep open buy limit orders on thing I'd like to pick up at a "crazy" price, maybe some will get hit. Picked up a few things on some of the flash crashes.
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Old 12-30-2012, 11:06 AM   #3
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The Dow closed at 12,938 on Friday, so if it drops 200 points that would be around 12,738 or so.

Last year at this time it was around 12,218.

So, I guess I'll go ahead and do my annual rebalancing, as always during the first week in January.
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Old 12-30-2012, 11:11 AM   #4
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I am also trying to time my next major index buys; but, if history is any guide, I will either be months too late or years too early.
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Old 12-30-2012, 11:17 AM   #5
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I plan to indulge in my usual market timing. When I accumulate enough extra cash, it's time to put it in the market. To make life simple, I'll be using my usual asset allocation to select which index funds to buy.
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Old 12-30-2012, 11:38 AM   #6
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Dow futures are down 200+ points as of 10 am cst. Looks like we will be going over the cliff. I smell a buying opportunity and keeping my powder dry. Any thoughts?
IMO Dow futures mean little to nothing, it's where the markets close that matters. I've seen futures like this on a weekend only to have them be down 25 or 50 points by 8 or 9 am on Monday. I don't have a clue as to what'll happen, frankly I think it can still go either way tho I wouldn't be surprised if it is not resolved.

Buying opportunity may well come but it won't be on 1/2 or 1/3. I'm hoping for a nice sell off and I'll buy some but is 5% all we can expect? I'd like to see the S&P 500 index drop to 1300 or 1250 but that's probably expecting way more than what'll happen.
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Old 12-30-2012, 11:41 AM   #7
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I'm lazy. I have an allocation plan of 40% equity with 5%pt bands. I haven't had to do anything since 2009.

I may get off my butt on Monday and sell the last slab of 2025 TIPS though.
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Old 12-30-2012, 11:48 AM   #8
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I have a shopping list ready and DW's bonus to invest. Hopefully we get a nice dip.
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Old 12-30-2012, 11:50 AM   #9
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I took a small bite last Friday after 6 straight days of market decline. I think there will be a temporary patch fix in the next couple of days (even though that means very little over the long run) so I am not quite sure there will be carnage on Monday. But if there are more blood on the street in the coming weeks, I'll do what the Rothschilds advised when that happened.
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Old 12-30-2012, 11:53 AM   #10
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I have a shopping list ready and DW's bonus to invest. Hopefully we get a nice dip.
For those still accumulating, a nice 7,000 - 8,000 point dip would be good.
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Old 12-30-2012, 12:43 PM   #11
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Fiscal Cliff is one thing, but we also have the debt ceiling which may rear its ugly head again. I am not sure Monday is the day to wade back in, so I will probably hold pat for a while longer.
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Old 12-30-2012, 01:24 PM   #12
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I'm pretty uncomfortable with being in the market. I don't currently have any common stock. But I do have some preferred shares. I do have a fair amount of cash that I have recently repositioned with limit buy orders on preferred shares at low 2008 levels. I don't have alot of confidence anything will ever execute. I'm shopping for long term bonds while I wait. I don't see alot of good opportunity out there but I'm open to it if it shows up.
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Old 12-30-2012, 01:37 PM   #13
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i have stated many times long term bonds are not a bad bet. it is all about capital gains at this point.

if you believe things are looking pretty crappy and may get worse a 1 point drop in long term rates can reward you with a 30% gain. on the other hand if rates rise you at least get a 2% plus floor on the downside.

if rates move against you sell em before there is much damage.

i can argue strongly why they may be the investment for the next year or so.

the entire world is deleveraging, thats deflationary. the worlds banks will eventually have to deal with europe. they will need cash. selling assets to raise cash is deflationary.

there are enough bad things happening to cause that long term rate to fall a point or so in my opinion.
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Old 12-30-2012, 02:02 PM   #14
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Powder dry? Does that mean cash? Why aren't you at least in a bond fund that will go up? One can always exchange from a bond fund into an equity fund with a few clicks.

Or for the more brave, no shorts?
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Old 12-30-2012, 02:24 PM   #15
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For those still accumulating, a nice 7,000 - 8,000 point dip would be good.
Now...now, lets not get carried away. I was thinking more like a 10% correction.
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Old 12-30-2012, 02:36 PM   #16
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Why aren't you at least in a bond fund that will go up?
A good question! I always want to be in what will go up.
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Old 12-30-2012, 04:04 PM   #17
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I smell a buying opportunity and keeping my powder dry. Any thoughts?
Yeah-- stick to your asset allocation and only buy as much as you need to rebalance.

That way you don't have to keep an eye out for every burp in the market. This one has not exactly sneaked up on us.
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Old 12-30-2012, 04:14 PM   #18
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Powder dry? Does that mean cash? Why aren't you at least in a bond fund that will go up? One can always exchange from a bond fund into an equity fund with a few clicks.

Or for the more brave, no shorts?
At the end of this video, Doubleline's Gundlach suggests now is a good time to be holding cash. In my opinion, he is one of the sharpest knives in drawer from a bond perspective.

Gundlach: Fiscal Crisis the Issue, Not Fiscal Cliff: Video - Bloomberg
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Old 12-30-2012, 04:15 PM   #19
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I hope this is wrong!

http://www.jsmineset.com/wp-content/..._image0047.jpg
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Old 12-30-2012, 05:09 PM   #20
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Yeah-- stick to your asset allocation and only buy as much as you need to rebalance.

That way you don't have to keep an eye out for every burp in the market. This one has not exactly sneaked up on us.
Yep, we started writing about this quite a few months ago:
Any upside in the next 6 months? But there is still time to be wrong about this.
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