LOL!'s Market Timing Newsletter

[LOL!]

OK, I expect a little fade here in the last hour of trading. Since VSS (small-cap foreign) is up the least today while some small-cap emerging markets (DGS, EWX) are up the most, I've put in a limit order to buy some shares of VSS at a price a little bit lower than it is trading now.

I've got to go mow the lawn now, but I should be done before the market closes and may update this post.

Update: It looks like my idea of a fade did not happen and my limit order won't execute.

 

[LOL!]

Bought shares of VSS (small-cap foreign) a moment ago.

Today seems like more of a consolidation, wait-and-see day, but I noticed SCZ (small-cap developed) is up a bit while everything else is flat and VSS was still down from yesterday.

I used a market order and still got a decent execution with 4 separate partial fills 6 and 7 cents below trades on either side.

 

[NW-Bound]

Good eyes. I just logged onto a Schwab account and grabbed a bit of the equivalent SCHC, adding to the position I already have in that account.

 

[LOL!]

I'm not so sure it was good eyes at all as now my typical display of today's price changes doesn't seem to reflect at all what I was seeing this morning.

But the VSS shares are up and since I sold some bond fund shares yesterday to get the cash to buy equities, I avoided the downtick in those bond fund shares if I had not sold.

All this means that probably everything will tank tomorrow, but I hope not.

 

[NW-Bound]

Well, I have made 2.5c a share, net of all transaction costs (which is zero because it's a Schwab ETF).

At 50.5% equity, I still have a lot to go till I get back to my normal 70% AA stock. I am patient.

 

[LOL!]

It's been very interesting watching the futures market react to the US election.

 

[Sunset]

I'm putting in a small order tonight, based on a 5% drop.

 

[LOL!]

My recent trades are unexpectedly working out mostly because I avoided a 1% loss in a bond fund that I sold earlier in the week. The VSS I bought has dropped below my purchase price, but by less than 0.5%.

I picked up some shares of VTI at the open and they are up 1%. Also bought back some bond fund shares at 1% cheaper price.

DGS (small-cap emerging markets) is down about 3%, so I bought some of those shares, too. I've not done anything with large-cap foreign, but VEA is holding its own today.

Bottom line: I think I will be gaining on my benchmarks which is really all I want to do.

 

[LOL!]

Sold a chunk of the VBR (US small-cap value, up 2.5% today) purchased on 9/26 at a small gain.

Used the proceeds to buy some DGS (small-cap EM) (down 3% today) and BND (total bond down 1% today).

Update: I forgot to say what I was going to do: If DGS goes up and VBR goes down, then I intend to reverse this trade. Today's differential was more than 5%, so I think these two have a good chance of closing that "gap" soon.

 

[NW-Bound]

I just bought a bit of a very short-term bond fund. Its yield of 5% is too hard to resist.

 

[LOL!]

Yesterday's trade is not working out well. The difference increased another 2.5% because US small-cap value went up and small-cap EM went down. Plus bonds have continued to drop.

 

[audreyh1]

I just bought a bit of a very short-term bond fund. Its yield of 5% is too hard to resist.

Which short-term bond fund has a yield of 5%?!?

 

[NW-Bound]

Well, what do you offer for a finder fee?

Just kidding. This is a high-yield corporate bond ETF with an effective duration of 1.34 years. You can search the Web and find a bunch of them.

I bought the one for a Schwab account because Schwab offers no commission. No bond analyst here, so when I see companies like Dynegy and Citigroup, I assume that the default risk is low.

PS. The market is apparently repricing all bonds for the risk of higher interest rates. I hope their price will stabilize soon.

 

[LOL!]

With DGS down another 3% and IJS up more than 2%, there must be something fundamentally changed with emerging markets. And it is exchange rates.

I've basically blown these trades. My only consolation is that I've avoided some bond fund losses, but right now that's not enough to cover my new losses in DGS.

 

[NW-Bound]

My EM ETFs do not do well either, despite the overnight move up of many Asian stock indices. I wonder if that's because of the China stock contents of many EM funds.

Here in the US, the Dow went up well, but the Nasdaq slumped. Tech stocks and defensive stocks like utilities and consumer staples and REITs lost some more. Pharma, financial, industrial, and basic material stocks keep rallying.

So, for non-indexers, whether one wins or loses today depends heavily on your sector concentration. I ended up with a small loss.

 

[Henry Lili]

Nwbound. Which ST fund? If you don't mind sharing

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[NW-Bound]

About the short-term bond funds? Oh well, I will spill the beans. Does nobody call me a shill now!

Guggenheim has several of these, with fund termination dates of 2016 to 2024. At termination, the portfolio is returned as cash to shareholders. You can find out more at their Web site.

These funds hold bonds with ratings of BBB, BB, B, and a bit of CCC. They have no AAA, AA, or A issues, hence have a "high-yield" of 5%. The 5%+ is after losing 0.4% for fund expenses, but I am glad to pay that to get diversification. No holding is higher than 2.5% of the funds (most are 1% or less), so that's the loss if any single one goes belly up.

Being ETF's, they are bought just as stocks at your favorite brokerage.

 

[LOL!]

The damage to foreign and small-cap EM continues today. And US small-cap value continues to climb. IJS is up 2.35% right now and up more than 10% in the last 5 days.

If I had made no trades since August, then I would be looking like a genius, but instead ….

I just made a calculation after Friday's market close: My portfolio is down 0.066% more than if I had made no trades this week. So I can take solace in my risk mitigation techniques of not committing too much of the portfolio to these trades.

 

[LOL!]

Moral victory today: Portfolio was actually UP since Friday.

 

[NW-Bound]

Same here. Portfolio up a bit, while bonds keep on dropping. I only have 5% in bonds, so that limits the damage some.

EM keeps dropping too. Should have jettisoned them, but I did not know the effect would be so severe. Well, might as well hang on for a bounce, I guess.

As talked about in previous posts, I bought a bit of short-term corporate bond, so that it shows up on my Quicken screen for me to remember to monitor it. Will add more when things settle out a bit more. I still have 41% in cash, and want to get better than the bitty yield.

 

[Henry Lili]

Thanx. I am familiar with Bullet Shares and the Isjare

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[Henry Lili]

Ishares counterparts. May take a look.

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[Henry Lili]

Initiated a position in a non leveraged municipal CEF this morning. Trading at at 52 week low and a discount roughly at a 52 week high. Duration of 6 years or so May be a bit long for some. I plan to sell off a non municipal, leveraged CEF if /as it rebounds effectively trading taxable, leveraged income for tax free non leveraged income.

Sent from my LGL34C using Early Retirement Forum mobile app

 

[Sunset]

I just bought a bit of a very short-term bond fund. Its yield of 5% is too hard to resist.

Thanks for sharing, I looked at it, and liked what I saw, so bought some within an IRA.

 

[NW-Bound]

Ah, some people are buying. Perhaps that's why these reverse the slide and go up today. My sales pitch works!

I stumbled across these corporate bond ETFs myself by surfing Schwab Web site looking for investment ideas. Been buying a bit here and there for the last 6 months to build a bond ladder of different durations.

Let me add this for people who listen to Bogle. I just found this recently, although the info was posted on 10/14/15, a year ago. I am not an avid Bogle follower although I respect his view. And of course I am pleased that he approved. The corporate bonds I get are of lower quality, but of shorter terms however.

Bogle: Corporate Bonds a Sensible Way to Pick Up Yield

Adding more investment-grade bond exposure to the total bond index might be a good way to boost returns without too much additional credit risk, says Vanguard founder Jack Bogle.
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See: Bogle: Corporate Bonds a Sensible Way to Pick Up Yield

PS. Note that Bogle said that one would deviate from the total bond index by tilting to corporate bonds, and that it is good for ya!