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Old 08-22-2013, 09:52 AM   #21
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Market timing driven by fear precludes someone from jumping in before the "surge"
If the OP is driven by fear of what might happen, then equities is not ever the place to be.
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Old 08-22-2013, 02:11 PM   #22
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AA and long time horizon is my friend
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Old 08-22-2013, 02:34 PM   #23
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Once you've tasted the spoils from a lucky streak of market timing, it's hard to get that out of your mind. But, don't confuse luck with skill.

I doubled my money, it took less than two years, and I think about it every day. What I should buy next? Luckily, it's only a few hundred bucks in the game. Maybe it's an addictive personality or another not-so-rare strain of personality/psychology. A shipping stock, no less. See this thread. Added NM at 3.05 on 10/6/11. Sold 8/21/13 at 6.20. Of course, it was over 6.40 at one point today.

So, how long can you market timing addicts go?

-CC
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Old 08-22-2013, 05:29 PM   #24
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OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
My comment is that it's easy to be wise on a message board, but not quite so easy when you're on record for the exact timing and amount of your trades. The date of your post indicates that you may well have sold your IRA funds at yesterday's closing price. If so, you are now down about 1%, based on today's strong stock market performance. Naturally you may very well make that up in coming days, if you're indeed right about future bumps in the road. But I'd like to see what you do as it happens. Care to go on record with what you've sold and for how much, so that we can track your performance? And of course please update your trades as you make them, so we can see if you get back into the market with a profit or a loss.
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Old 08-22-2013, 05:53 PM   #25
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By the way, I encourage you to treat my challenge to reveal your trades and prove to us that you can successfully time the market as a legitimate offer which there is no reason to doubt you may win. You have posted your intention to do market timing on a board full of buy-and-holders. Naturally there is a lot of skepticism, but that doesn't mean that your fears aren't justified. Perhaps you've chosen the perfect time to sell and will be rewarded for your insight. If so, I will be more than happy to give you full credit. But a post without trade dates and numbers is useless from the point of view of deciding whether you'll eventually come out ahead or behind.
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Old 08-22-2013, 08:09 PM   #26
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We have to cut swodo some slack.. He didn't say mrket timing was better, but just that he sorta got cold feet an decided to throw in the towel.
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Old 08-22-2013, 09:39 PM   #27
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My comment is that it's easy to be wise on a message board, but not quite so easy when you're on record for the exact timing and amount of your trades. The date of your post indicates that you may well have sold your IRA funds at yesterday's closing price. If so, you are now down about 1%, based on today's strong stock market performance. Naturally you may very well make that up in coming days, if you're indeed right about future bumps in the road. But I'd like to see what you do as it happens. Care to go on record with what you've sold and for how much, so that we can track your performance? And of course please update your trades as you make them, so we can see if you get back into the market with a profit or a loss.
And you are paying him how much for this entertainment and (hoped for) schadenfreude?
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Old 08-23-2013, 05:58 AM   #28
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OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
I believe there is going to be a big correction as well, so I have a lot of money in cash. In my case, I am 5 weeks into ER , and I want to preserve what I have for 72t. After that, I plan to adjust AA until I reach me ER AA.
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Old 08-23-2013, 06:17 AM   #29
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Originally Posted by swodo View Post
OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
Foolish move in my opinion - market timing rarely works - not so much because people don't get out at the right time but more because they rarely get back in at the right time.

I think the flaw in your thinking is that rising interest rates/falling bond prices will adversely affect equities. The only reason the fed will allow interest rates to rise is because the economy is becoming better and the favorable impact of the better economy will benefit equities a lot more than higher interest rates will detract from equities.

I'm an investor not a trader. While I concede that the market has had a nice run and a correction is likely, I'll just ride the correction down and then next rally back up. I won't try to make a smidgen more by a 3-4 month market timing move that could easily end up going bad.
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Old 08-23-2013, 08:43 AM   #30
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Quote:
Originally Posted by swodo View Post
OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
I am with you. All in Cash for a few months. Slept VERY well last night.
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Old 08-23-2013, 08:45 AM   #31
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Quote:
Originally Posted by swodo View Post
OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
Quote:
Originally Posted by ShokWaveRider View Post
I am with you. All in Cash for a few months. Slept VERY well last night.
Just wondering, to each:

What is your plan to get back into the markets?
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Old 08-23-2013, 09:13 AM   #32
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Just wondering, to each:

What is your plan to get back into the markets?
+1 There have been plenty of times that I thought I should get out, but often, the market just would have went on w/o me. Would I get an entry point well below where I got out? Would I just jump back in when it got close to where I got out (and then maybe see it drop more)? Tough calls, IMO.

To each their own, but I think Id lose more sleep worrying about that then I would with the roller coaster market.

-ERD50
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Old 08-23-2013, 11:05 AM   #33
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What is your plan to get back into the markets?
+1

The problem with market timing is that you have to make two correct decisions. One to get out and another to get back in.

My crystal ball is broken and my time machine is not working. So making just one of those calls correctly is tough for me. Academic studies indicate that making yearly AA adjustments works pretty well. That is enough market timing for me.
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Old 09-19-2013, 01:11 PM   #34
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OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
It looks to me as if we have here a great object lesson in the dangers of market timing. As it turns out, the markets have responded with strong gains in the four weeks since OP wrote that he was sitting out of the market for the next few months in the face of what he perceived to be unavoidable large losses. As measured by representative Vanguard funds, Vanguard total stock market index (VTSAX) has since gained over 5%, Vanguard International stock index (VTIAX) has gained over 8%, and even Vanguard total bond index (VBTLX) is up 1%, not including dividends. A typical balanced portfolio consisting of 60% stocks and 40% bonds with a 75%-25% split between domestic and foreign stocks would now have missed out on 4% in gains in less than a month.

Nor was OP's move to the sidelines particularly poorly timed. He had several chances in the week or so following his original post to get back into the market at a slightly lower price than what existed on August 21. But considering his announced intention to sit out of the market for 3-4 months, I am skeptical that he made any purchases at all in late August. As other posters have noted, successful market timing requires two good decisions - when to get out, and when to get back in. Get both right and you're golden. Get only one right, and you lose.

So what's next? Assuming OP is still sitting with large amounts of cash, he now is faced with a dilemma - buy back now at higher prices, or continue to wait for the arrival of the "unavoidable" large losses. I'm not sure what I would do in his shoes. I'm just glad I avoided the market timing trap in the first place.
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Old 09-19-2013, 01:27 PM   #35
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I am not against market timing but have seen precious few good ideas on it.

Market timing that is not based on extensive back testing is generally what we get to hear about. Most of the "debunking" of timing methods is based on attacking poorly conceived MT approaches.

If a really good MT system was found, we would not get to hear about it.
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Old 09-19-2013, 05:46 PM   #36
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From a Retired Old Guy now..

1. This is why I moved into using Balanced Funds back in the 90's..
2. Same to me as hiring a FA to run the show for me
3. Thus They can Take the Blame and I can stay out of the Dog House ( or Garage in my Case)..

IF a Bal Fund does the same as a Portfolio of Funds? Why should I knock myswelf out and Try to Screw it up?

All I have to do is Focus on Just Put Enough $ in it per it's Limitations..of what it does..

I added an Aggressive Multi Bond fund, PONDX/PIMIX

A Combo of VWIAX/VWINX and BERIX has done the job good enough for me..
and It's Broad based into LC, MC and SC's enough for my blood..

BTW- they are the 2 Funds I Recommend to my Family for their Core Funds to get started with.. and to anyone else Getting started on Saving and Investing..

It's the old Vegas Trick- Don't try to make More with less, you will take Too many Risks and that is what they want you to do, to loose your $ to them..

Only those with Extra $ they an afford to Loose -50% of , should be Betting more than those kinds of Bal Fund Do..
FYI- that's a ave of about a 35/65 portfolio BTW..

And what's VWINX done since it got started some 40 yrs ago? But don't tell others, Wall Street and FINA and even Jack Bogle don't want to let that secret out..( Didn't Jack Bogle Run Wellington and their Bal Funds and got fired? and went out and Set up those Indexes to Compete and Take $ away from them...

If want to Market Time? I tell others Go ahead and try and then after you Fail enough, just own 2 bal funds.. A VWELX for when you want to be Aggressive and a VWINX when you don't want to be..

Or a VWINX and a PRWCX..

Hope that Helps!

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Old 09-19-2013, 06:27 PM   #37
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Wasn't there a thread some years ago where the guy was all worked up about getting out at DOW 14,000, then getting back in if went over? We warned that he might get whip=sawed, but it looks like it could have worked out for him (which doesn't change if it was a good idea or not).

But then, he would have had to have been in something that gave at least the divs of S&P500. That wasn't so easy to do and still be liquid enough to get back in. And that would just put you even with doing nothing (though maybe avoid drawing down while it was down).

I wonder how that worked for him? I'm not sure I could find the thread, anyone recall it?



-ERD50
I don't think this was me....but my memory stinks. This is what I did. Put money back in as the market dropped. I am reasonably better off because of this. If I get ready to go out for a run and see a big rain cloud coming....I put on my rain coat. Occasionally it doesn't rain on me....usually I am right.
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Old 09-19-2013, 06:48 PM   #38
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The OP still has a chance because of the projected shutdown of the US government due to lack of funds, passage of bills, etc. That ought to produce some interesting market timing possibilities. Anyways, I am cheering him/her on!
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Old 09-19-2013, 06:59 PM   #39
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OK I give up. I just moved all IRA funds to a money market fund. ( I'm retired).
I believe that with the tapering of QE interest rates can only rise, driving down bond fund prices and adversely affecting equities. Can't see how you can avoid large losses in the short run. Not a market timer until now, but I now believe it to be wise to stay out of the market for 3-4 months until the Treasury quits meddling and the market achieves some sanity.

Comments please.
You will find that a lot of folks here have no use for market timing, but I personally have no problem with what you did, if it works for you and the situation you are in. In other words, if you have other sources of retirement income (pension, SS, 401k, etc), and the the IRA is something you prefer to be conservative with (perhaps as a small supplemental source of retirement income), then hey, who are we to criticize your approach? I also took some IRA $$ off the table recently, as I am basically in the situation described above, and I'd rather conserve principal than take a big loss. Sure, you (and I) may miss out on some gains over the next few months if the market continues upward, but that personally would not bother me one bit. I do think this market has been propped up for far too long with this QE nonsense, and it's gonna come back to earth at some point. I have no idea when that will be, but I personally sleep better at night with my IRA out of the market for the time being. YMMV...........
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Old 09-19-2013, 10:43 PM   #40
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One key thing that can make this work is to have many opportunities to give it a try. As a one-shot thing it's pretty much just a bet. But if you can do it 100 times and be right 51% of the time you might come out ahead.
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