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Reduced Stock holdings to 25% today from 50%
Old 09-10-2014, 09:17 AM   #1
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Reduced Stock holdings to 25% today from 50%

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.
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Old 09-10-2014, 09:25 AM   #2
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I went to all cash today in my trading account. It is but a small portion of our overall portfolio which 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.
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Old 09-10-2014, 09:28 AM   #3
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So you are all overwhelmingly in cash, or you are swapping a bet on stocks for a bet on bonds?
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Old 09-10-2014, 09:33 AM   #4
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Good luck. Let me know when it's time to get back in.
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Old 09-10-2014, 09:45 AM   #5
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Originally Posted by Running_Man View Post
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.
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?
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Old 09-10-2014, 10:18 AM   #6
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I just bought some Vanguard total market index fund shares in the last two days and planned to continue doing so ($2000 per day) in the next few days if S&P500 is below 2000.
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Old 09-10-2014, 10:38 AM   #7
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Market timing never works, only ensures that you will underperform since there is nothing to tell you when to get back in.
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Old 09-10-2014, 10:54 AM   #8
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Market timing never works, only ensures that you will underperform since there is nothing to tell you when to get back in.
Never say never, but I'm also confused by the 'sell-low-buy-high' approach.

-ERD50
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Old 09-10-2014, 10:57 AM   #9
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I'm continuing to do nothing. I'm at about 95% stocks and 5% cash (with some ISM/OSM hidden in there somewhere).

Taxable dividends plus cash on hand plus small freelance income means we won't have to sell anything if the markets get sad for a few years.
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Old 09-10-2014, 10:58 AM   #10
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Never say never, but I'm also confused by the 'sell-low-buy-high' approach.

-ERD50
I've learned not to question it too much since the trading activity creates more liquidity and reduces bid/ask spreads for the very infrequent trades I make.
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Old 09-10-2014, 11:18 AM   #11
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Market timing never works, only ensures that you will underperform since there is nothing to tell you when to get back in.
Anytime someone says never about an idea or event I start to doubt.

Perhaps if you put an almost in front of that.
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Old 09-10-2014, 11:21 AM   #12
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Quote:
Originally Posted by Running_Man View Post
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 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
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Old 09-10-2014, 11:25 AM   #13
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Anytime someone says never about an idea or event I start to doubt.

Perhaps if you put an almost in front of that.
I am sure there are people who have successfully timed the market, but I doubt its consistently. Rather then attempt to join a very small minority in beating the market, I will gladly accept just matching the market.

Matching the market over decades with regular contributions has up to this point made everyone a nice retirement. I will take that.
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Old 09-10-2014, 11:25 AM   #14
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My stock percentage hit 65% a couple of weeks ago so I transferred 5% to my stable value fund to get back to my 60% equities AA goal. Whichever way the stock and bond markets go I'll rebalance back to 60% equites.......I also use that rule when taking income.

Good luck timing the market...I avoid numerology and rumor when managing my portfolio and make decisions of the recent past rather than an unknown future.
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Old 09-10-2014, 11:46 AM   #15
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My stock percentage hit 65% a couple of weeks ago so I transferred 5% to my stable value fund to get back to my 60% equities AA goal. Whichever way the stock and bond markets go I'll rebalance back to 60% equites.......I also use that rule when taking income.

Good luck timing the market...I avoid numerology and rumor when managing my portfolio and make decisions of the recent past rather than an unknown future.
+1. I rebalanced to 60% a couple of weeks ago. I did time the market during the last big dip (2008) and made a profit. But I've since come to realize the odds of my consistently beating the market were very small, and I just got lucky that time.
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Old 09-10-2014, 11:46 AM   #16
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I am down to ~45% equities (33% if I include investment real estate). I can't go much lower without paying taxes through the nose.
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Old 09-10-2014, 11:48 AM   #17
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Originally Posted by Running_Man View Post
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.
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.
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Old 09-10-2014, 11:49 AM   #18
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I am down to ~45% equities...
Me too, and I've been there for several years.
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Old 09-10-2014, 11:54 AM   #19
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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.
ha-ha! +1
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Old 09-10-2014, 11:56 AM   #20
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Interestingly regarding re-balancing: I am 85+/-5% equities (30% of that international), and despite market behavior, I'm still closer to the 80 than I am to the 85%. In June, I re-arranged my semi-monthly purchases such that I would buy more international and US equities than previously, and that percentage has ticked upward, but not as quickly as I had calculated. I suspect that when January rolls around and I take another look at moving things, I might actually push more into stocks... but if everything works out I'll just do nothing but tweak my purchases for the next six months.
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