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Old 09-20-2013, 05:51 AM   #41
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Sorry, but some will probably not like this but after Many yrs. of Following the Leader and Indexing..Down the Yellow Brick Road...

And If you're Right more than wrong, will you still come out ahead? I don't think so..Your $ makes +50% , but then why isit every 4-5 yrs it's Looses -40% ? Just look at the Tot. Losses of the VFINX btwn 00-02' and again in 08' and 1st qtr of 09'..etc.. And if you loose -40% you end up being in the Hole by -10% aren't you? $1,000+ 50% = $1,500 -40% = $900...
Timing is the key! But not what you think! It's when your Getting ready to cash in and Retire .. and being Too Greedy that comes back and Gets you..

What if you could make the same as a 70/30 Port of using LC's but only having 40% In Other Equity Indexes? and thus run a 40/60 port and end up making the same at the end of your Earning yrs b4 retirement....

40% In VIMSX .. Just compare it since it came out in 98' to VFINX .. And Read Em' and Weep! and the same for past 10,5 yrs! I think we have been Misled..!

1- I think The S&P500 is a Conspiracy supported and Monopolized by Corp America.. And ever wonder why CNBC and others Don't Talk much about using Mutual Funds?
2- If Real Growth is In Mid Size Co's, why hasn't that been the 1st Index and The Most Indexes Advocated? Why did it take so Long for them to Come out? and Compare VFINX to VIMSX starting at the same time..(98') & to past 15,10, 5 and 3 yrs..
-After I realized this and As soon as VIMSX came out, I droped the VFINX/S&P500 From my Port and Went into Mid and Never Looked back eversince.. and I even added Non Index MC Funds since ..

Of course I am Biased- Seeing I Ran my own Small Business for Yrs.. and ever since I got out of the Army in 1968..

I think it's too bad the likes of Wellington Funds ( VWELX & VWINX) didn't build thsoe funds based upon the MidCap instead of LC's, I bet those funds wood have done at least 2% apy better by now..if not More...

Mid Caps , be they Indexes or Non Index Funds..
While not the only one's, just the One's I own> VIMSX, AKREX,HFCSX,POAGX, PRNHX and Not Knowing which is the best of the rest? Equally Invested in each..

And You can leverage and get More Bang for you buck now with your Bond $.. using a PONDX/PIMIX.. Leveraged 150%, thus you can Put in -50% less and get the same as being 100% more in Reg. Bond Fund..

It's too bad we ave Investors Couldn't Get leveraged Bond funds alot earlier , but Then Co.'s Like Pimco & Vanguard Wouldn't have succeeded as well..I have no doubt they influenced Leveraged Funds Not being made available to the rest of us.. and still do.. If I could Leverage Long VBMFX by 50% I would Own it..

Use stocks to Make your $ and use your Bonds as your Banker to buy those Stocks when they're On sale..

History may not Repeat, but it sure does Rhyme alot, doesn't it?

My$ where my Big mouth is..

My Shared Port @ 2013E&B

& Learn how to Leverage @ Products | Direxion
and Do what the Pro's have been able to do for Yrs..with alot less On the Line..

Best of Luck!
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Old 09-20-2013, 06:39 AM   #42
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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.
Nice analysis. I don't agree with Ha I don't think this schadenfreude, but rather an object lesson..

I don't have a problem with limited amount of market timing. I suspect that even those who claim not to do it all are somewhat guilty, changing when they rebalance, or being a little flexible on there rebalance bans.

As both this forum and FIRECalc show there is little difference in survivability from a 40/60 mix to 80/20 for 3.5-4% withdrawals.

I am certainly guilty of it and don't even feel bad being a dirty market
But in my case it is a rare situation where I move my AA 5% at time, even during 2008 I basically made two 10%+ shifts from bonds to stocks.

No we don't know how much of the OP assets were in the IRA nor the starting and ending AA. If it was only 20% and the AA went from 50/50 to 100% cash he only missed on less than 1% hardly a big deal.

If on the other hand the IRA was 50% of his assets and IRA went from 75/25 to 100% cash then he missed out on 2%. If the money is still sitting out sidelines a year from now and the market is up another 10%. This is how retirement finances get screwed up.
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Old 09-20-2013, 06:53 AM   #43
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To each his own. Time and time again it has been proven, market timing is a fool's game. As JB would say "Stay the Course"
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Old 09-20-2013, 06:54 AM   #44
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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!
Hmm, "cheering him/her on" is a little farther than I would go, but I certainly wouldn't mind seeing OP's prediction of a big downturn come true. In addition to the general motive of not wishing ill to anyone (and therefore not wanting to see OP sitting on the sidelines while the market continues straight up), I have the personal incentive that a correction would help me. I've hit my rebalancing targets several times this year already, and so have been a net seller of stocks in an up market. I wouldn't mind at all being able to rebalance back into the market at lower prices.

I think the main reason that "market timing" is frowned upon while "rebalancing" is considered ok is that rebalancing never causes one to sell so many stocks that one eventually will need to buy back into the market at potentially higher prices. If the market continues up, I will just sell more stocks to reestablish my target allocations. Someone who has already sold all of their stocks in expectation of a big decline needs their guess to be right, or they're out of luck.
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Old 09-20-2013, 07:51 AM   #45
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I don't have a problem with limited amount of market timing. I suspect that even those who claim not to do it all are somewhat guilty, changing when they rebalance, or being a little flexible on there rebalance bans.



I am certainly guilty of it and don't even feel bad being a dirty market
But in my case it is a rare situation where I move my AA 5% at time, even during 2008 I basically made two 10%+ shifts from bonds to stocks.
Exactly what I was thinking. If one rebalances at a certain time each and every year, I wouldn't consider those dirty market timers. But if one rebalances at various times of the year and tweaks their AA a little due to market conditions, I would consider those market timers. Many do that including me. But I admit, cashing all out seems a little extreme to me.
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Old 09-20-2013, 10:25 AM   #46
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Timing last year and so far this year has paid off for me. Don't want to push my luck though...I'm getting close to setting up an A/A that I can stick to. Once I'm no longer able to add funds to my TSP, I'm not gonna be feeling so brave....
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Old 09-20-2013, 11:55 AM   #47
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I'm from the different approach in that I'm trying to be passive (lazy) and just rebalance once a year but if my target allocations drift by more than 5%, I'm fighting the temptation to rebalance earlier than annually.
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Old 09-21-2013, 08:11 AM   #48
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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.
Or not, the transaction costs on doing it 100 times might erase any gains.
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Old 09-21-2013, 09:01 AM   #49
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To each his own. Time and time again it has been proven, market timing is a fool's game. As JB would say "Stay the Course"
Although I don't have a big pile of money in stocks, I have learned I am no good at market timing. Hell I can't even "mini market timing". I learned (relearned) that lesson again just this year with my Roth contribution. Had the $5500 ready to deposit first of January. Had the bright idea of "making a few extra bucks" by letting the market drop a bit then buy. Well I waited and waited before finally giving up on this folly idea two weeks before the deadline in April and missed out on some gains.
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Old 09-21-2013, 10:32 AM   #50
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I exhibited spectacularly bad timing last week. Rotating about 120K out of S&P500 into short/intermediate bonds I had given myself a sell level of 1680. And the next day Larry Summers withdraws and the market goes up 1%, then a couple of days later the Fed decides not to taper and the market promptly rockets up to 1720 plus. So I threw out over $3K by not waiting a week. Grrr.

Seriously though, this is exactly why I NEVER move more than 10% of my assets at a time. I've guessed wrong and right over the years, but burned myself often enough that I believe in dollar cost averaging (in AND out) as an article of faith.
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Old 09-21-2013, 11:15 AM   #51
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I exhibited spectacularly bad timing last week. Rotating about 120K out of S&P500 into short/intermediate bonds I had given myself a sell level of 1680. And the next day Larry Summers withdraws and the market goes up 1%, then a couple of days later the Fed decides not to taper and the market promptly rockets up to 1720 plus. So I threw out over $3K by not waiting a week. Grrr.

Seriously though, this is exactly why I NEVER move more than 10% of my assets at a time. I've guessed wrong and right over the years, but burned myself often enough that I believe in dollar cost averaging (in AND out) as an article of faith.
Trading is something a person should do after careful study. Don't study the stuff? ... then don't do it. The best traders are mathematicians.

Even when you study the stuff, you realize this is a statistical situation where you will be on the wrong side of the trade for possibly a long time. Some trades will bring a long term loss.

BTW, I'm not a trader. But I'm fascinated by the stuff.
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Old 09-21-2013, 12:19 PM   #52
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Trading is something a person should do after careful study. Don't study the stuff? ... then don't do it. The best traders are mathematicians.
Actually, I AM a mathematician (or at least that's what my degree's in), and that's part of why I don't try to time markets. Too much voodoo and mob psychology mixed in with the analysis for my taste.
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Old 09-21-2013, 04:31 PM   #53
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Actually, I AM a mathematician (or at least that's what my degree's in), and that's part of why I don't try to time markets. Too much voodoo and mob psychology mixed in with the analysis for my taste.
From a mathematician's perspective, what is your investment strategy? Boring index funds and rebalancing?
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Old 09-28-2013, 08:36 PM   #54
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Sorry, but some will probably not like this but after Many yrs. of Following the Leader and Indexing..Down the Yellow Brick Road...


1- I think The S&P500 is a Conspiracy supported and Monopolized by Corp America.. And ever wonder why CNBC and others Don't Talk much about using Mutual Funds?
2- If Real Growth is In Mid Size Co's, why hasn't that been the 1st Index and The Most Indexes Advocated? Why did it take so Long for them to Come out? and Compare VFINX to VIMSX starting at the same time..(98') & to past 15,10, 5 and 3 yrs..


Best of Luck!

My stock AA is biased towards mid, small value, and international. If I had a simple portfolio, I'd hold a big chunk in Total Stock Market and add in the mid/small/international pieces.
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Old 09-28-2013, 08:41 PM   #55
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I exhibited spectacularly bad timing last week. Rotating about 120K out of S&P500 into short/intermediate bonds I had given myself a sell level of 1680. And the next day Larry Summers withdraws and the market goes up 1%, then a couple of days later the Fed decides not to taper and the market promptly rockets up to 1720 plus. So I threw out over $3K by not waiting a week. Grrr.

Seriously though, this is exactly why I NEVER move more than 10% of my assets at a time. I've guessed wrong and right over the years, but burned myself often enough that I believe in dollar cost averaging (in AND out) as an article of faith.
I move in chunks--usually three a year--over at least a year and often two, since I've discovered I'm often right when I sense over or undervalueing makes buying/selling attractive, but I'm often early a year or two. In the case of China, I was 4 years early, but kept dollar cost averaging into it. I was wrong about Japan, both in buying and then in selling, although at least I diversified the money into an Asia fund, so got part of the gains, just not nearly as much as if I'd held.
I tend to take half gains after one of these goes up 100% in a 2-3 year period.
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Old 09-29-2013, 07:18 AM   #56
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I move in chunks but I rarely look back to pat myself on the back for good timing or chastize myself for bad timing. Ignorance is bliss.
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Old 10-03-2013, 11:53 AM   #57
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I know...AA..and rebalance.. and that's the course I will follow..but with all the shutdown and debt ceiling talk, is anyone getting nervous?

Just checking ...

Quote:
The Treasury Department cautioned about dire consequences that might arise from the debt-ceiling issue, which some strategists view as blending together with the government shutdown. If Congress does not raise the debt limit and the U.S. defaults on its obligations, that would be “catastrophic” for financial markets and the economy, potentially resulting in more damage than the 2008 financial crisis, the Treasury said.

U.S. stocks extend losses; Dow off 180 points - Market Snapshot - MarketWatch
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Old 10-03-2013, 11:55 AM   #58
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I'm more pissed than nervous.
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Old 10-03-2013, 11:55 AM   #59
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I'm more pissed than nervous.
Good point
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Old 10-03-2013, 12:18 PM   #60
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I'm more pissed than nervous.
And we all know who to blame ... the "other" party.
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