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How do you pick your entry point?
Old 10-16-2017, 02:08 PM   #1
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How do you pick your entry point?

Chart reading, technicals, news? As a very casual stock market player, just getting back into the market after a 15 year hiatus, I'm curious
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Old 10-16-2017, 02:15 PM   #2
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Originally Posted by 97guns View Post
Chart reading, technicals, news? As a very casual stock market player, just getting back into the market after a 15 year hiatus, I'm curious
I generally put in a limit order for 1% under the cost at the beginning of the month. If it doesn't hit by the 15th or so, I buy at market.
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Old 10-16-2017, 02:17 PM   #3
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I like US Companies, and specifically companies local to my state. I am 100% US even if it means lower returns at times.

Then, I look for upward trending EPS. I like value stocks...problem is everything is overvalued.

Then, there are all sorts of little technicals like ex-dividend, volume, 52week high/low. I look at the morningstar rating, and analyst BUY ratings. I use google finance to search past and current news related to the company.

or sometimes I just plain guess. For instance bought TASR after the Trevon Martin shooting, problem was I bought at the right time, but sold at the wrong time. Now the company has been acquired.

I sold DAL, own MMM and CASY so you can probably figure out where I live.

Curious after 15 years off, why get back on the horse now?
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Old 10-16-2017, 02:25 PM   #4
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Curious after 15 years off, why get back on the horse now?


I've been holding only hard assets since 911, silver, gold and real estate. I'm just getting tired of my silver and gold holdings not making any gains and have lost a lot of potential being on the sideline, just looking to have some of my money make money and looking to get some added monthly income. I recently got married and really can't afford the stagnation like I was able to absorb when single.
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Old 10-16-2017, 02:47 PM   #5
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"The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently." -- John Bogle

or, more: https://www.cbsnews.com/news/the-sma...market-timing/

The thing about the markets is that they are so noisy, up/down, down/up/sideways that there are always people who get lucky with timing and, from that, conclude that they are geniuses.

Statistical studies repeatedly show that dollar cost averaging doesn't work any better than just jumping into the deep end of the pool, but from a psychology point of view it lets a single investor mitigate downside risk at the expense of possible upside.
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Old 10-16-2017, 03:09 PM   #6
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How do you pick your entry point?

Answer: Any time I have extra funds.

During the majority of my investing horizon (35 years) the market has appeared expensive, IMO. There were a few times it appeared under priced. So, I have always just put extra money into the market when I had it. It has worked. IIRC, you are relatively young. If I were you, I would determine my overall allocation including stocks and rebalance to get there. If it turns out you are moving a sizeable amount of your NW to stocks, I might dollar cost average. But as others have mentioned, that might not provide much benefit.

FN
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Old 10-16-2017, 03:40 PM   #7
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By asking about entry point, you have just defined yourself as a Dirty Market Timer, and will hereby be shunned on this forum.

Just kidding, but it's like the saying that the best time to plant a tree was 20 years ago, and the next best time is today.
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Old 10-16-2017, 03:52 PM   #8
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15 years out of the stock market? Even with the 08-09 drop, that is a long time to be out.

Stock picking is a fools game and entering now might send you reeling when the next drop comes.

Consider 50/50 asset allocation/mix of stocks and bonds.

100% index based. Total US Stock index + Total International Stock index + Total US Bond (or Tax-Exempt if taxable dollars)

Buy all the US stocks, all the international stocks and all the us (intermediate) bonds. Less is more.
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Old 10-16-2017, 04:29 PM   #9
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By asking about entry point, you have just defined yourself as a Dirty Market Timer, and will hereby be shunned on this forum. ...
I wouldn't be that harsh at all. I would say the OP has defined himself twice as being somewhat naive. Once, by failing to capture fifteen years of market returns by attempting to time and second, by now wanting to time again. I'd bet that most of us have been guilty of trying to time to one degree or another. There's nothing evil about it. It's human nature. Fear and greed in a stalemate.

+1 on @bloom2708's philosophy. My spin on it is to begin with 100% of equities in a total world market fund (like VTWSX), plus directly purchased high quality bonds including a large dose of TIPS. Allocate to taste, home country bias to taste.

One of life's little mysteries to me is why people allocate towards fixed income for safety and a more stable ride, then hunt around for yield, risk, and instability in the fixed income category. Seems like it would be easier to get the yield, risk, and instability by just leaving a slightly larger % in equities, then take the easy and safe govvie and high quality corporate path in fixed income.

Edit: corrected the stock symbol VTWSX
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Old 10-16-2017, 04:47 PM   #10
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Chart reading, technicals, news? As a very casual stock market player, just getting back into the market after a 15 year hiatus, I'm curious
What prompted your exit 15 years ago?
What prompts you to want to get back in soon?

For me, my entry point was way back when I first had enough income to divert some of it into investments. That was a long time ago and I've just kept adding ever since.

But then I don't consider myself a player, just a saver and investor.
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Old 10-16-2017, 04:51 PM   #11
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As several suggested, now is the time vs not now. Not beating you up, if you had the precious metals assets in stocks for past 15 years instead, you would be so much further ahead. You should have been riding that stock equities wave a long time ago.

One thing, you have to view stocks as longer term. 15 years is certainly longer term.
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Old 10-16-2017, 06:49 PM   #12
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I track about 25 stocks (big, stable, dividend, well run), and generally keep pretty much all my money in the dozen or so with the best valuation (IMO). When any stock I own gets relatively over-valued compare to any I track and do not own (by 10-15%), I sell it and buy the lower-valued one. Same approach since 1993. Some years I have no trades.
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Old 10-16-2017, 06:56 PM   #13
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Sell some metal and buy some stock. Easy.
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Old 10-16-2017, 09:34 PM   #14
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I buy as soon as possible after I have extra money. I completely ignore all technical indicators when doing so.

I sell as late as possible before I need extra money. I completely ignore all technical indicators when doing so.
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Old 10-16-2017, 09:52 PM   #15
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Statistical studies repeatedly show that dollar cost averaging doesn't work any better than just jumping into the deep end of the pool, but from a psychology point of view it lets a single investor mitigate downside risk at the expense of possible upside.
Statistics favor the lump sum (on average).

But then an investor can't help but ask - are these average times?

I will never forget having to face investing a lump sum in late 1999. It was frightening.

I decided to average in over two years.

Was I just lucky? Maybe, but late 1999 was also extraordinary.

Was anyone surprised when things started to roll over in 2000? Seemed like we were all waiting for it. I don't think anyone expected a repeat like 1999.

Totally agree with the psychology part. Ultimately it comes down to what strategy gets you to systematically invest, and stay invested. Averaging in and rebalancing made it possible for me.
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Old 10-17-2017, 06:22 AM   #16
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Statistical studies repeatedly show that dollar cost averaging doesn't work any better than just jumping into the deep end of the pool, but from a psychology point of view it lets a single investor mitigate downside risk at the expense of possible upside.


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Statistics favor the lump sum (on average).

But then an investor can't help but ask - are these average times?

I will never forget having to face investing a lump sum in late 1999. It was frightening.

I decided to average in over two years.

Was I just lucky? Maybe, but late 1999 was also extraordinary.

Was anyone surprised when things started to roll over in 2000? Seemed like we were all waiting for it. I don't think anyone expected a repeat like 1999.

Totally agree with the psychology part. Ultimately it comes down to what strategy gets you to systematically invest, and stay invested. Averaging in and rebalancing made it possible for me.

Count me as also in this camp. After I was out of the market for some time I got back in over the course of a year.

The way I implemented this was to open up two funds at Vanguard:
  • A money market fund
  • A balanced fund

I moved my assets initially to the money market fund.

I then setup a monthly auto-transfer to move a fixed amount from the MM to the balanced fund.

It was set it and forget it.

No Regrets

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Old 10-17-2017, 07:34 AM   #17
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I would say that if you are determined to get back into equities after a long lay-off, and having missed out on a long bull market, the best answer is this:

Enter when you can stomach an immediate 40% drop in that part of your portfolio, and are pretty darn sure you won't need to cash out that money for 10 years.
Chances are good it won't drop 40% right away, but if you can't handle that possibility, and might have to eat that loss before a decent recovery time, you are getting in too deep, too fast.

That's my opinion, anyway.
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Old 10-20-2017, 07:02 AM   #18
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I adopt the psychology school here: start small, gradually step in over an investment cycle. Talking 5 tot 10 years here, not months.

It's not about statistically the best decision for me, but about minimizing regret and promoting stability.
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Old 10-24-2017, 10:56 AM   #19
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I start with the question of what is the worse case scenario? Can I go broke? Can I lose all my money? If the answer is not very likely then I take a look. If I am not sure, or the answer is yes, I do not invest. I have learned to never invest in something I do not understand. It sounds so simple and basic, yet investors make this mistake all the time. {not here on this forum,but in general}

It's one of the worst mistakes one can make. If everything looks good about an investment but you do not understand the risk, run away. No one ever went broke by holding cash and looking for the right investment.
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Old 10-26-2017, 06:32 PM   #20
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I wouldn't be that harsh at all. I would say the OP has defined himself twice as being somewhat naive. Once, by failing to capture fifteen years of market returns by attempting to time and second, by now wanting to time again. I'd bet that most of us have been guilty of trying to time to one degree or another. There's nothing evil about it. It's human nature. Fear and greed in a stalemate.
I'm not a market timer, but I'd advise everyone to read the OP's signature line which reads, "Fired at 39 in 2009 with less than $300k in total net worth, current net worth 1.7mil." Even if he was out of the stock market for 15 years, he's obviously killed it with his hard asset investments. Sometimes we get caught in the belief that the way we do things is the only way, but I know plenty of people who've gotten rich without ever owning stocks.
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