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02-02-2009, 07:00 PM
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#1
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Recycles dryer sheets
Join Date: Sep 2004
Posts: 330
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Selling Out
Has anyone within the past month or so sold their entire stock portfolio and just gone with fixed income (CD/MM/ Treasuries) and wait for the tide to settle. I imagine this is easier with a IRA than in a taxable account from an accounting(tax) standpoint.
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02-02-2009, 07:08 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Have you, ferco?
__________________
Numbers is hard
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02-02-2009, 07:11 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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I've been working on the opposite, and trying not to spend all my cash doing it.
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02-02-2009, 07:22 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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I can't imagine wanting to lock in my losses like that.
I do understand wanting to DO SOMETHING. But I guess that doing nothing is the best I can come up with.
It's going to get better.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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02-02-2009, 07:25 PM
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#5
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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No I haven't sold anything. And I don't plan to either. Right now yields on cash, CDs and treasuries are very unattractive IMO, and treasuries seem pretty risky at the moment (LT treasuries are down almost as much as stocks YTD).
But, the bigger problem is when will you know that the tide has actually settled? Will you wait for the DOW to reach 10,000, 11,000, or 12,000 again before feeling that the recovery is underway?
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02-02-2009, 07:29 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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BTW, can anyone do better than Pen Fed's 5 year CD at 4.39%?
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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02-02-2009, 07:32 PM
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#7
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Quote:
Originally Posted by brewer12345
BTW, can anyone do better than Pen Fed's 5 year CD at 4.39%?
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Last week, I found a USAA 7-year CD at 4.5%.
Edit: too late, it's down to 4.25% today. Their 5-year CD now pays 3.5%.
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02-02-2009, 08:13 PM
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#8
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Recycles dryer sheets
Join Date: Nov 2008
Posts: 131
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Quote:
Originally Posted by Want2retire
I can't imagine wanting to lock in my losses like that.
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I never understood this thinking - I don't mean it's not valid, but maybe I just don't get it. Hypothetically, say you sold stocks now - 'locking in losses' as you say. But then you put it in something that doubles (say) while stocks stay flat or continue to decline. Then you shift over to stocks again before they start increasing. What losses were locked in? Seems to me that the person who sits pat is the one locking in losses, day after day.
Yes yes, obviously you have to make good moves for this to work, but as an ER friend once told me, you always invest like you go shopping: buy stuff on sale.
OP: I did this two years ago, because I believed stocks were way overvalued. It's never too late to recognize the true value of an investment, I believe.
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02-02-2009, 09:23 PM
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#9
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Recycles dryer sheets
Join Date: Sep 2004
Posts: 330
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REW,
No, I haven't sold the stocks , yet ! But, as one of the possible options with this mess I wanted to get some of the pros and cons from the board.
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02-02-2009, 10:42 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 1,224
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Quote:
Originally Posted by Architect
I never understood this thinking - I don't mean it's not valid, but maybe I just don't get it. Hypothetically, say you sold stocks now - 'locking in losses' as you say. But then you put it in something that doubles (say) while stocks stay flat or continue to decline. Then you shift over to stocks again before they start increasing. What losses were locked in? Seems to me that the person who sits pat is the one locking in losses, day after day.
Yes yes, obviously you have to make good moves for this to work, but as an ER friend once told me, you always invest like you go shopping: buy stuff on sale.
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Timing the market only requires me to get it right twice each time. Now you want me to get it right twice and pick (guess) what other asset will beat the market in the interim ? Think I'll stick with an AA appropriate for my risk tolerance and automatically acquires what is on sale (relatively).
DD
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02-02-2009, 10:58 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,350
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Quote:
Originally Posted by ferco
REW,
No, I haven't sold the stocks , yet ! But, as one of the possible options with this mess I wanted to get some of the pros and cons from the board.
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Ever hear "buy low, sell high"? What you're suggesting is to do the opposite. Selling at a low is just about the worst possible choice. You should be holding, maybe buying, not selling IMHO.
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02-02-2009, 11:06 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by aaronc879
Ever hear "buy low, sell high"? What you're suggesting is to do the opposite. Selling at a low is just about the worst possible choice. You should be holding, maybe buying, not selling IMHO.
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To frame the problem carefully, he would be selling at a low relative to the past 6 years or so. We really don't yet know if it is also a low relative to 6 months from now, or a year from now.
Most of us are agnostic about this. Architect thinks he knows that equities will be lower in the future than they are today. He may be right for all I know.
One rather peciliar thing is that we have not yet had a meaningfull rally. There was short covering coming off the November low, but it fizzled quickly. Not a real hopeful sign for the bulls.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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02-03-2009, 04:10 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Quote:
Originally Posted by brewer12345
BTW, can anyone do better than Pen Fed's 5 year CD at 4.39%?
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Maybe Navy FCU at 5.1% 4.6%. Navy FCU had that 5.1% for about a month now but now they have dropped to 4.6% on long (7 Year) term CD's. They still have the 3.5% 6 month $10K minimum CD's there.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
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02-03-2009, 08:13 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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I almost did in October 2007...
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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02-03-2009, 08:15 AM
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#16
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Recycles dryer sheets
Join Date: Nov 2008
Posts: 131
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Quote:
Originally Posted by haha
Architect thinks he knows that equities will be lower in the future than they are today. He may be right for all I know.
Ha
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I don't think I've said I think stocks will be lower, if I did I misspoke. What I believe rather is that stocks still aren't a good deal. They can go up this year for all I care, I don't think the risk/reward is worth it yet. But if they go down further then I'll invest again, because then I think I'll be adequately compensated for the risk I'm taking.
Off topic, it's interesting that I hear people on this board frequently make prognostications, such as 'Treasury bonds are going to get hammered' or 'yields are too low', but they don't get called out for that forecast. But if you make a judgment call on stocks people quickly remind you that you can't predict the future.
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02-03-2009, 08:32 AM
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#17
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Thinks s/he gets paid by the post
Join Date: Oct 2008
Location: Naples
Posts: 2,179
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Quote:
Originally Posted by slouch
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You start out by stating these are best "bank" CD's and then you list all those "credit unions". I know credit union CD's are insured but only by themselves, not the FDIC. If a credit union fails, you may be able to recover your money but I don't know how long it takes. Does anyone out there know the difference in the insurance of the FDIC vs the credit union's insurance program? I've got a $100k CD maturing next week and need a good place to park it.
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02-03-2009, 08:37 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by Architect
I don't think I've said I think stocks will be lower, if I did I misspoke. What I believe rather is that stocks still aren't a good deal. They can go up this year for all I care, I don't think the risk/reward is worth it yet. But if they go down further then I'll invest again, because then I think I'll be adequately compensated for the risk I'm taking.
Off topic, it's interesting that I hear people on this board frequently make prognostications, such as 'Treasury bonds are going to get hammered' or 'yields are too low', but they don't get called out for that forecast. But if you make a judgment call on stocks people quickly remind you that you can't predict the future.
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It's a discussion board, so people are likely to have different views about nearly any issue. The trick is to manage to discuss politely and express one's own views while staying within our Community Rules. I think that each of us has at least SOME thoughts or opinions that are not shared by the majority here. For me, it is my refusal to have a credit card, which I think is utterly brilliant and a wonderful and stupendously LBYM tactic, whereas 99.99999% of our forum members disagree.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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02-03-2009, 08:48 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
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Quote:
Originally Posted by JOHNNIE36
You start out by stating these are best "bank" CD's and then you list all those "credit unions". I know credit union CD's are insured but only by themselves, not the FDIC. If a credit union fails, you may be able to recover your money but I don't know how long it takes. Does anyone out there know the difference in the insurance of the FDIC vs the credit union's insurance program? I've got a $100k CD maturing next week and need a good place to park it.
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Most credit unions are insured by the National Credit Union Administration (NCUA). There are about 2% privately insured, so look them up on the NCUA website to make sure they are Federally insured. Same limits as FDIC and backed by the full faith and credit of the US Government like the FDIC (for what that's worth these days ). Here's a link explaining NCUA deposit insurance. BTW, credit unions refer to deposits as "shares" - it's really the same thing, just a different term:
National Credit Union Administration - Consumer information
__________________
I purr therefore I am.
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02-03-2009, 09:00 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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__________________
Numbers is hard
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