Reduced Stock holdings to 25% today from 50%

[ExFlyBoy5]

Thank you! I need market timers to continue to be market timers to make my long term strategy work. Hopefully more follow suit and I can get a discount on my upcoming semi-monthly automatic purchase.

+1. I would like additional folks to "get out of the game" so I can go scoop up some more at a discount rate!

 

[Fermion]

+1. I would like additional folks to "get out of the game" so I can go scoop up some more at a discount rate!

Scooping up at a "discount rate" would be market timing.

 

[MaddMaxx]

Scooping up at a "discount rate" would be market timing.

Not if you are buying biweekly in your 401k. It only becomes timing if you sell and buy based upon a guess as to what the market may or may not be doing.

 

[Fermion]

Not if you are buying biweekly in your 401k. It only becomes timing if you sell and buy based upon a guess as to what the market may or may not be doing.

Eh, then you are not really scooping up bargains, you are just vacuuming the floor and getting the moldy cheerios along with the pennies.

 

[MaddMaxx]

Eh, then you are not really scooping up bargains, you are just vacuuming the floor and getting the moldy cheerios along with the pennies.

When you invest for the long term, anything purchased on a pull back is considered a bargain. After all, the market for the most part continues forward over time, minus occasional pull backs.

I am not trying to change your investing style, just telling you that market timing the vast majority of the time leaves money on the table either being incorrect on when to buy in, or when to sell. There are many investors who have been on the sidelines for a year or two waiting for that eventual pull back. They have missed out on all of the returns.

 

[Options]

What do you know that the market does not?

 

[Running_Man]

So you are all overwhelmingly in cash, or you are swapping a bet on stocks for a bet on bonds?

I converted to cash at this point (US Treasury Fund)

 

[Running_Man]

If you sold at 1986 and will buy back in at 2020, you sold low (based just on this range) and will buy high? And where did you park the proceeds until you buy again at 2020?

I expect it might go lower, I cannot explain how discomforted I felt this morning as I started reviewing all the action from yesterday, the markets seem to me to be hitting an inflection point, however if it goes to 2020 then I will admit I was just a stupid nit in selling and get back to my same allocations I had before I sold. At most this will cost me .5% of my portfolio. There are others who maybe would have bought long term puts with .5% of a portfolio but I don't like to go that route.

 

[Running_Man]

What do you know that the market does not?

I take this is not a serious question but actually an inference that this is not a smart move, which may very well be true.

 

[Running_Man]

Never say never, but I'm also confused by the 'sell-low-buy-high' approach.

-ERD50

If one expects a certain outcome and it does not come to pass you have to be willing to admit you are wrong. That I am always willing to do.

 

[Running_Man]

Market timing never works, only ensures that you will underperform since there is nothing to tell you when to get back in.

2020 in the S&P will tell me to get in, or perhaps it will be like in 2007 when I got out at 1420 and in 2 years later at 750

Here is last time I did this but I was much more pessimistic than I am now: S&P 1420:http://www.early-retirement.org/forums/f28/time-to-start-buying-again-26627-2.html#post497454
Here is where I got back in S&P 500 756, so I have a few points in the bank to play with:
http://www.early-retirement.org/forums/f28/step-up-and-call-the-bottom-42856-6.html#post793877

there was also in October of 2009 where I had thought Dow 10,000 might stop the rally but by 2010 the Fed and the government had shown their hand and the extreme level of financial support to the financial markets and I have been in pretty fully (for me) since 2010.

 

[LOL!]

There are some interesting things on the calendar coming up. One is the Federal budget impasse in Congress again. Another is the mid-term election. The Scotland thing will affect UK and other stocks, too.

And you know all the other stories.

 

[springnr]

I went to all cash today in my trading account. It is but a small portion of our overall portfoliowhich is pretty heavy in stocks but it sure does feel good to be in cash (also feels good to be up over 60% YTD...makes me not so worried about near term inflation eroding that account while in cash).

I am ready to jump back in on a few names though. Gilead if it drops below $100, Apple below $90, Radio Shack if they pay me something to buy it.

Congrats!

 

[John Galt III]

Anybody remember about a month ago the talking heads were warning that "Main Street" investors were finally starting to re-enter the market, and that that was sign that a correction was imminent?

 

[Fermion]

There are so many talking head experts now it gets hard to figure out which one is right. Goldman is still sticking by their $1050 gold by the end of the year. Some other was predicting oil will go to $150 while his rival was saying it was going even lower than it is now.

Makes me wonder who really is the dumb money and who is the smart money.

 

[mickeyd]

I can't believe that smart well read folks still believe that market timing is a viable financial strategy. Have you ever read anything written by Jack Bogle?

 

[MichaelB]

I don't know how this will turn out but it was nice (and courageous) of Running Man to share his strategy with the rest of us.

 

[foxfirev5]

Speculator vs Investor. Which is the proper path? Either can work along with many other strategies as long as one has a grasp of the risks involved. Win a few lose a few.
Personally now that ER is in sight I am being a little more conservative and adhering mostly to my plan. Although I admit I have peeled off some equities lately but keeping within 2 pts of my 45% equity AA. I want to secure the first few years of retirement in short term, SV and cash. Hopefully my equity stake will climb above 45% during this timeframe. Oh no, not only a minor market timer but now I'm a buckets person also.

 

[nun]

I have been watching the interaction between the markets as S&P500 hit 2000. While most people and reality show that 2000 should really not mean anything, it is apparent that it means something to the market.

Since S&P 500 hit 2000 long term bonds have reversed and rates have gone up. Yesterday came the announcement the FED may be changing the verbage in their forward statements. This convinced me that 2000 is meaning too much to too many important people so I sold this morning while S&P500 was at 1986. I will get back in if the market can close above 2020. Having had some huge gains the last 2 years, I am more than willing to try and time this market here.

I accomplished this by actually selling all my ETF holdings and closed end funds that I held and keeping my individual stocks which comprise 25% of my portfolio, as this is the minimum stock holdings I feel one must maintain.

The downside risk to my portfolio for this year is around .5% of upside but I'll be happier if I can see the market through this area with the factors that are also occurring coincidentally at the same time.

I haven't been watching the interaction between the markets as S&P500 hit 2000. While most people and reality show that 2000 should really not mean anything, it is apparent that it means something to the market, but not to me.

Since S&P 500 hit 2000 long term bonds have reversed and rates have gone up. Yesterday came the announcement the FED may be changing the verbage in their forward statements. This did nothing to convinced me that 2000 is meaning too much to too many important people so I did nothing this morning while S&P500 was at 1986. I will continue to rebalance whatever the market does. Having had some huge gains the last 2 years, I am more than willing to rebalance according to my plan.

I accomplish this by actually selling my ETF holdings when they are up and buying fixed income. I have no individual stock holdings.

I don't know the downside risk to my portfolio for this year, but I'll be happy rebalance my AA to a 60/40 whatever the circumstances.

 

[redduck]

...Makes me wonder who really is the dumb money and who is the smart money.

As I recall, there is a poker expression (and I'm paraphrasing just a bit) that if you don't know who the dumb money is at the table, it's probably you.

 

[Fermion]

As I recall, there is a poker expression (and I'm paraphrasing just a bit) that if you don't know who the dumb money is at the table, it's probably you.

Which is why you pull your chips off the table as the OP has done.

 

[Running_Man]

I can't believe that smart well read folks still believe that market timing is a viable financial strategy. Have you ever read anything written by Jack Bogle?

Yes but I prefer the advice of Benjamin Graham

 

[sengsational]

There is no short term predictor that works, and the long term predictors only sort of work. So selling out at 1980 with a plan to get back in at 2020 makes no sense to me. I could understand getting out now, since the PE10 is sort of high, but then the buy back would have to wait until the PE10 went way down, not up more!

 

[JacqJolie]

Yes but I prefer the advice of Benjamin Graham

+1 - Although I listen to Seth Klarman's advice more nowadays since he's alive and all that.
I went heavily into cash in June and July and have continued selling here and there in September. No buys.

Seth Klarman Truman Show Market - Business Insider

"But the zeitgeist is so damn pleasant, the days so resplendent, the mood so euphoric, the returns so irresistible, that no one wants it to end, and no one wants to exit the dome until they’re sure everyone else won’t stay on forever."
"...what investors see in the inkblots says considerably more about them than it does about the market."

 

[Running_Man]

I assume this cost you little or no tax?

I think you have good feel for markets, and may well be right. I cannot do this huge change without paying a lot of tax plus weird add on taxes. No 401k for me, just taxable and small IRA and Roth. I have sold a lot, anything in a tax deferred or tax free account, and any loss plus a fair mount of ltcg in taxable accounts.

Ha

Yes this was all in my 401K IRA with Fidelity. My individual stocks are in after tax accounts.