What type of investor are you?

[Spanky]

What kind of investment strategy do you employ or believe?

Strategic allocation - develop an allocation, stick with it and balance it if necessary.

Tactical - change (or adjust) asset allocation based on market and economic conditions or projections.

Market timing/montentum - get in and out of market based on forecast or intuition. Buy what is hot and sell before it is cooled.

Combination - use of strategic, tactical and market timing.

 

[HFWR]

Strategic, tactical, and dirty-market-timer, in that order... O0

 

[cute fuzzy bunny]

I cant fit myself into these. I'd call myself 'strategic', except i've changed my allocations three times in the last four years, because I went from single and working to single ER to married ER with children to married ER with children with a working wife.

Strategy is different for each of those.

 

[brewer12345]

I picked other. I maintain allocations to foreign equity, foreign bonds, commodities, etc., but fundamentally I am a deep value type with a willingness to buy whatever is cheap and hold it for a long time, if necessary. So lately I have bought junk bonds, exchange-traded preferred stock, financials, a bulk shipping company based in the Marshall Islands, and a specialty chemical company.

 

[cute fuzzy bunny]

Brewer...what junk are you buying? I have a chunk of vanguards high yield corp...havent heard anybody say anything good about junk lately though. Was pondering dumping it in six months or so.

 

[brewer12345]

I'm not buying just any junk - just individual names. Junk as an asset class isn't terribly attractive, IMO.

 

[cute fuzzy bunny]

What do you think of the vanguard fund...the yields arent great but they seem to have improved the credit quality quite a bit lately, I think in anticipation of problems with lower quality debt.

After looking it over a while (bear in mind money markets were paying 3% and decent cd's 4.5% when I made this decision), with a yield in the 7.5% range, I didnt think I was taking on a whole lot of risk for 3-4.5% more yield. At least not in the last year and for the next year.

 

[wildcat]

I guess I changed over the past week or so when I bet big on an attractive equity - tactical (?)

 

[whitestick]

I replied "other" as I am short term trading options, specifically covered calls, thus I don't really look at the underlying stock other then it's fundamentals, and typically get called out within 6 months or so.
Certainly seems to qualify as other.

 

[brewer12345]

What do you think of the vanguard fund...the yields arent great but they seem to have improved the credit quality quite a bit lately, I think in anticipation of problems with lower quality debt.

After looking it over a while (bear in mind money markets were paying 3% and decent cd's 4.5% when I made this decision), with a yield in the 7.5% range, I didnt think I was taking on a whole lot of risk for 3-4.5% more yield.  At least not in the last year and for the next year.

The VG fund is relatively attractive, given that ot plays almost excludsively in the higher quality junk. But spreads are still historically thin, so I wouldn't be eager to make junk an outsized allocation because you really don't get paid for it.

 

[cute fuzzy bunny]

Eight percent scare ya? Throws off enough money for all the tv's and computers and wireless routers I keep buying

Oh yeah, and part of the food and stuff.

Lets me leave most of my other funds to reinvest dividends.

 

[brewer12345]

Eight percent scare ya?  Throws off enough money for all the tv's and computers and wireless routers I keep buying

Oh yeah, and part of the food and stuff.

Lets me leave most of my other funds to reinvest dividends.

It doesn't scare me and it is likely to be less volatile than, say, an equity fund. However, I look at historical junk spreads vs. where we are today and it doesn't get me excited. I also look at junk names every day and the kind of stuff that is out there in the junk market trading at such tight spreads is not what I would call a strong value. If you are hungry for yield, I think there are better places to get it, and I would be leery of holding a huge allocation in junk at these levels.