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Old 08-06-2012, 10:33 AM   #21
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I timed the sell perfectly but I missed the buy entirely.

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Old 08-06-2012, 11:44 AM   #22
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Originally Posted by ferco View Post
Did anyone "sell" / convert a significant portion of their tax deferred portfolio at the market high in Oct 2007 ( Dow 14,000), and place in cash holding position.....then "buy" / convert back to the original holding at the bottom Mar 2009 ( Dow 6,000).

This intuitively / intellectually sounds like a "smart" move, moving forward, since I presume Dow will again reach 14 k or higher and then have a market correction. It would seem that one would profit handsomely, but seems a bit too obvious.

My financial planning friend advises against this course of action , stating that this is like trying to predict the market.....DUH ! He believes the Dow will go even higher ( than 14 k) and that one should, be allocated between: Total Stock, Total Bond and International and ride it out over the next 8-10 years

Your thoughts

PS: I like Vanguard, he likes his brokerage company which doesn't offer Vanguard !!
Right! That's what 'my friend' does for me - actually it's a computer(no name) hidden away at Vanguard that sells high and buys low daily in my Target Retirement.

They call it rebalancing.

heh heh heh - after 40 years(1966-2006) I tossed in the towel and went full auto with retirement money.

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Old 08-06-2012, 01:52 PM   #23
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I missed the "sell high" but did plenty of the "buy low" in 2008. We were only 2 years away from ER and at minimum expenses, maximum savings so we continued to max out 401k's and IRA's all through '08, putting most of it into equities as we were out of balance on our target AA.

Like Unclemick, now that we are retired, we have most everything in VG and Fido target or balanced funds and let their computers do the buy low sell high thing.
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
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Old 08-06-2012, 05:59 PM   #24
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I'm participating in live technical analysis project at a Morningstar forum (Portfolio design and analysis). My project data is at this link. The summary chart shows you the particular challenge of using an indicator to sell and buy. It is relatively easy to sell a portion or all of an investment according to a moving average signal. Getting back in according to a pre-set signal is more difficult for Jill or Joe average investor.

The proponents of long term moving average signals to exit and re-enter usually describe the strategy as mitigation effort. You may partially exit and give up some upside, but when the big one comes you have preserved more of your investment.

I think I've read at least a hundred variations on the theme. For instance, some may exit a fund that has lost momentum, and move to fund(s) that show momentum. If you grab historical data and play out a strategy like this, it is tempting to apply such tactics to a portion of your portfolio. As for me, I continue to look and evaluate, and only used such tactics once, in the flash crash. I forgot to watch the signal closely, and did not get back in at the indicated time. That's the challenge of being a working stiff. I simply don't have time to implement all the alerts that would be necessary. I also have very little investing acumen.

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