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Old 03-26-2010, 02:42 PM   #21
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Weather it is or it is not does not move this discussion on. This article explains it.

Halloween Effect (Sell in May, Go Away) - CallWriter's MONEY newsLETTER

I have not found a good analysis of when it did not work. I know it did not in 2009
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Old 03-26-2010, 02:48 PM   #22
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There have been many years where it did not work - more of them recently. It's one of those things that so many people are aware of it, it doesn't work as advertised - either not at all, or investors "front-run" the time period so the timing gets skewed.

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Old 03-26-2010, 02:49 PM   #23
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If you did sell, what would you do with the proceeds?
Good point!
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Yep. Some folks came VERY close to selling at the bottom but managed to hang on.

Once again, I'm happy with my AA and I'm sticking with it. Probably.
Same here. I stuck to my AA clear through the market crash and that was a great test. After going through all that I'm not going to change my AA now.

Besides, those who do sell in May might lose some of the post-crash ride up. Or not. Let me consult my crystal ball....


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Old 03-26-2010, 05:29 PM   #24
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If you did sell, what would you do with the proceeds?

I can put the money in Vanguard Money Market or Schwab Value Advantage and earn a fabulous .01% lets see on a million dollar that is $100 bucks a year.

Or I can stick in the Schwab High Yield Check or Savings account and get 50x as much .5% that gives me a whole $5,000 to spend a year on a million dollar portfolio. Or I can but 6 month T-bills at .23% or 6 Month CD's at .5% Schwab or Vanguard or 1% at Penfed. Suffice to say with any of the approaches I am not going to be having Trombone Al's problem of not spending enough money...

Of course buying back in November looks very attractive at lower price unless of course the market has moved higher. It which case my options seem to be try and figure out how to live in world where safe investments pay only 1 to 2% or stick the money back in the market that is even more overvalued.
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Old 03-26-2010, 05:38 PM   #25
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IMO - stick with a disciplined rebalancing plan. You will capture gains on the way up. Don't try to time the market.
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Old 03-27-2010, 09:36 AM   #26
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You might be correct about May
Read this
T Theory‚„Ę Foundation: T Theory‚„Ę Daily Updates, Forecasts, Charts and Data

If you like that, then look at the below for his discussion of the 80 and 40 year cycle.
Terry Laundry's T Theory‚„Ę Observations: Terry Laundry's Weekly T Theory‚„Ę Observations for March 21 2010

Also, look for his Best Bond Strategy.

I don't think buy and hold will be as easy as it was in the past 30 years.

I will be watching the May time frame and might go to cash to re-balance.

The other thing to ask yourself is: how much upside remains?
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Old 03-27-2010, 10:22 AM   #27
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IMO - stick with a disciplined rebalancing plan. You will capture gains on the way up. Don't try to time the market.
So much wise advice in such a short post but oh so difficult for many to execute.

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Old 03-27-2010, 11:27 AM   #28
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So much wise advice in such a short post but oh so difficult for many to execute.

DD
The reason is that the fear of losing takes over rationality.
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Old 03-27-2010, 11:30 AM   #29
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The other thing to ask yourself is: how much upside remains?
Not much according to most forecasts out there in the net. However, how accurate or creditable are these forecasts? In the final analysis, no one knows for sure. We can always guess.
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Old 03-27-2010, 08:31 PM   #30
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Whenever my taxable account gains 10% I cash it in and pay down the mortgage.
Poof. Now your money is lost in the walls of your house.
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Old 03-28-2010, 10:40 PM   #31
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C'est dommage!
Perhaps I wasn't clear. I have a ton of vested company stock options that are well in the money and I need to exercise them in order to take advantage of the relatively low tax rates until the end of the year. I will sell the stock upon exercising the option (same-day-sale) because otherwise, company stock would overwhelm the rest of my portfolio. So I am selling because the stock (which is a speculative small cap) has done very, very well and I am locking in a tidy profit. I have new options vesting every month, so if the stock keeps doing well, I'll keep reaping the reward. If it doesn't, at least I am limiting the downside risk. I think I can live with that!
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Old 03-29-2010, 03:23 AM   #32
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Perhaps I wasn't clear. I have a ton of vested company stock options that are well in the money and I need to exercise them in order to take advantage of the relatively low tax rates until the end of the year. I will sell the stock upon exercising the option (same-day-sale) because otherwise, company stock would overwhelm the rest of my portfolio. So I am selling because the stock (which is a speculative small cap) has done very, very well and I am locking in a tidy profit. I have new options vesting every month, so if the stock keeps doing well, I'll keep reaping the reward. If it doesn't, at least I am limiting the downside risk. I think I can live with that!
Exactly. Keeping your eggs all in one basket is never a good idea, i.e., tying up your career AND (too much of) your personal fortune in the same company as your career.

...don't ask me how I know this...

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Old 03-29-2010, 08:03 PM   #33
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well seeing as how i am going to be FIRE'd in the next year this is my year to consolidate and reduce risk so yes I will be selling quite a bit this year and storing some cash on the sidelines... now this will only be temporary until i find a nice niche for the $$$
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Old 03-29-2010, 09:11 PM   #34
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Sell in May? Or did you mean mayday-mayday-mayday?
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