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Is this (see below) partially a market timing thread?
01-06-2019, 03:55 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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Is this (see below) partially a market timing thread?
How is what knowledgeable CD and MM investors do different from what knowledgeable dividend stock investors do?
As I read the very popular Best CD & MM Rates Thread 2018 - 2019 thread, it appears to me that timing and predicting play a significant role in an investor's decision as how do handle this part of one's portfolio.
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01-06-2019, 04:35 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 1,961
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Interest rates have the Fed at least saying which direction they want rates to go.
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01-06-2019, 06:59 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,895
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 Quote:
Originally Posted by redduck
How is what knowledgeable CD and MM investors do different from what knowledgeable dividend stock investors do?
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Who says either of them are "knowledgeable"?
I have yet to see data to back up the strategy of investing in "dividend stocks", and a number of posters have tried.
I haven't followed the CD/MM thread, but the rates are transparent, and assuming within FDIC limits, the risk is the same. So that just seems like "shopping" to me. In a transparent, risk-equal environment, it makes sense to shop for the best deal, like with any commodity. If you get into time duration, then you are making some guesses on where rates are going. Probably not too different from stock picking, but with narrower bounds?
-ERD50
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01-06-2019, 07:50 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
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Quote:
Originally Posted by ERD50
Who says either of them are "knowledgeable"?
-ERD50
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RE: knowledgeable. Yeah, I couldn't find the right word. So, I tried to find a word that would at least be acceptable and not open for debate. Wrong again.  I guess I should have known the word would cause problems because spell-checker couldn't help me the first two times I attempted to spell it.
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When the people shall have nothing more to eat, they will eat the rich--philosopher Jean-Jacques Rousseau
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01-07-2019, 11:04 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
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I would think dropping bonds for cash (CD,MM) or changing bonds to different durations than what was set in your plan (guilty!) Can be considered market timing.
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“No, not rich. I am a poor man with money, which is not the same thing"
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01-07-2019, 11:51 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Mar 2005
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Quote:
Originally Posted by GravitySucks
I would think dropping bonds for cash (CD,MM) or changing bonds to different durations than what was set in your plan (guilty!) Can be considered market timing.
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When it comes to buying CD's I tend to buy 6 month CD's via my brokerages. As one six month CD comes due, I just buy another one from a US bank that pays the best. If a MM were to pay more, however, I'd keep the money in the MM. As for equities, I've always been a market-timer. I don't have the discipline to follow a financial plan. I kind of tried, I failed.
__________________
When the people shall have nothing more to eat, they will eat the rich--philosopher Jean-Jacques Rousseau
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01-07-2019, 01:32 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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Quote:
Originally Posted by Spock
Interest rates have the Fed at least saying which direction they want rates to go.
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Yes, but if an investor acts on what the Fed says what it is thinking of doing, wouldn't that be blatant market-timing?
__________________
When the people shall have nothing more to eat, they will eat the rich--philosopher Jean-Jacques Rousseau
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01-07-2019, 01:44 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 1,961
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Quote:
Originally Posted by redduck
Yes, but if an investor acts on what the Fed says what it is thinking of doing, wouldn't that be blatant market-timing?
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The Fed (sloppily) controls interest rates.
It would be stupid not to at least factor that bias into decisions on when and what term CDs to buy.
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