When to buy

[dmdunca44]

Quote:

Originally Posted by MichaelB You should protest by not going...

+1

I couldvtake the tickets off your hands...

[samclem]

Donheff, I've had these same (heretical) thoughts. But I'm resisting any impulse to act, as it usually ends badly for me. But if you buy at depressed prices you are hoping that the fiscal cliff is averted (and the prices go back up) or if we sail over the cliff that the equities were still priced too low. That's a lot of uncertainty.
Maybe just sell defense stocks short?
I'm not going to do anything.

[panhead]

These same thoughts have been going thru my head. I have some $$ that really should be put to work, but I'm hesitating as I'm thinking like a (nasty, dirty) market timer. Also, if stocks do go up and your allocation says re-balance into bonds, are you really going to do this? Maybe short term bond funds? I'm hesitating now and the cash pile that needs some place to go is getting bigger. Maybe I should just keep DCA'ing toward my target allocation even if it does say buy bonds, or whatever......then again the market might go down 10% making a good buying oppy, or it may go up, or...or....Arrrgghh! What to do?

[NW-Bound]

Ask not what you do is called dirty by others. Ask if it would make you money. That should be the driver.

Since when is buying/selling stocks considered immoral or unethical?

[MasterBlaster]

Don't do this !

[Dawg52]

When to buy

Part 2 of the question.......What to buy?

CD's maturing and rates almost zilch. Guess I will continue to invest in med's.

[Lsbcal]

Quote:

Originally Posted by NW-Bound Ask not what you do is called dirty by others. Ask if it would make you money. That should be the driver. Since when is buying/selling stocks considered immoral or unethical?

Some have gotten so carried away with the buy-hold mantra that they have made it a religion complete with identification of the devil worshipers.

Unfortunately this means any investing activity that comes close to being a function of time = .

Now that I think of it, maybe this gets back to old suspicions of speculation as an evil activity.

[Htown Harry]

Quote:

Originally Posted by LOL! I'm following LOL!'s Market Timing Newsletter. It has been quite uncanny in the accuracy of recommended moves.

I agree.

LOL! is definitely a canny guy, producing uncanny results in his LMTN.

un·can·ny (n-kn)
adj. un·can·ni·er, un·can·ni·est
1. Peculiarly unsettling, as if of supernatural origin or nature; eerie. See synonyms at weird.
2. So keen and perceptive as to seem preternatural.

can·ny (kn)
adj. can·ni·er, can·ni·est
1. Careful and shrewd, especially where one's own interests are concerned.
2. Cautious in spending money; frugal.

[panhead]

Quote:

Originally Posted by NW-Bound Ask not what you do is called dirty by others. Ask if it would make you money. That should be the driver. Since when is buying/selling stocks considered immoral or unethical?

HehHeh, this really is the point, isn't it?! I certainly don't find anything unethical or immoral about it and I certainly am heavily engaged in the activity. I simply am not good at timing the market, tho man, I wish I was! I do pretty much just buy and hold, but I often find my self building up cash cushions and waiting for a nice correction for an entry point. That certainly qualifies as timing, and is what I find myself doing now. I really do hate lazy money tho.....
If I try to start timing the market, I will let everybody here know when I start buying as it will be the equivelant of issuing a "Wheeeeee"!
(oops, sorry about that, lol!)

[NW-Bound]

Quote:

Originally Posted by panhead ...I do pretty much just buy and hold, but I often find my self building up cash cushions and waiting for a nice correction for an entry point. That certainly qualifies as timing, and is what I find myself doing now. I really do hate lazy money tho...

I do not trade that often, and as I have said repeatedly, my porfolio turnover is lower than that of Wellesley. However, I watch the market daily, and as you said, that watching or the interest is that of a market timer.

Quote:

Originally Posted by Lsbcal Now that I think of it, maybe this gets back to old suspicions of speculation as an evil activity.

Indeed, speculation is regarded as evil by some religions. Perhaps in the old days, before the days of the stock market and in the Middle Age, speculators traded and hoarded commodities such as grains, and caused shortage and made a killing during famines. This would be frowned upon, and the unfavorable view carries until today. A religious Web site says that "The speculator, even if he succeeds, produces nothing; he reaps the fruit of the toil of others, he is a parasite who lives by preying on the community."

Another religion prohibits the charge of interest for loans. Yet, it recognizes that businesses must be allowed to have profits. So, without charging interest, how do banking and financial transactions take place? They construct these deals so that they become "profit sharing" transactions, then it all becomes moral and legal. I suppose that turns one's banker into his business partner, which is not at all bad, but I am not sure how it works in practice.

The dictionary defines "to speculate" in the investment sense as "to assume a business risk in hope of gain; especially to buy or sell in expectation of profiting from market fluctuations". Speculation can be done with anything of value. The housing speculation done by millions of Americans who probably owned no stocks caused the housing bubble burst preceding the recent Great Recession.

In the loose sense of speculation, because stocks carry some risks, buying stocks is itself a speculative move. This is indeed the view of some people, a minority here surely, who would buy only CDs or treasuries. They regard any stock movement as risky, and equate stock investing with gambling. Whether they see the risk of inflation with fixed-income instruments, we do not know. Perhaps they recognize it but prefer that surely gradual loss to the risk of a potentially higher and faster loss with equities.

Next, one can see that even the buy-and-rebalance investors are also speculators, as they expect that the relative price of stocks and bonds will revert to the previous mean. They rebalance because of that very anticipated price movement. Surely some "buy low" because they believe in the fundamentals of what they buy, but many rebalance because they think "what goes down must come back up". Only the strict buy-and-hold who never sells can argue that he never speculates. He must also hold a declining stock even if he thinks it is going bankrupt.

Wikipedia has the following excerpt.

According to Ben Graham in Intelligent Investor, the prototypical defensive investor is "...one interested chiefly in safety plus freedom from bother." He admits, however, that "...some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone." Thus, many long-term investors, even those who buy and hold for decades, may be classified as speculators, excepting only the rare few who are primarily motivated by income or safety of principal and not eventually selling at a profit.

So, I would say that most of us are evil here, and differ only in how we see ourselves.

By the way, in jest, I often quote the character Gordon Gekko's saying about greed. They had a sequel to the movie Wall Street. It's called Wall Street: Money Never Sleeps, came out in 2010, and enjoyed some popularity. Because I do not get out much, I heard about it just now, and will look for it.

[brewer12345]

Quote:

Originally Posted by Dawg52 When to buy Part 2 of the question.......What to buy? CD's maturing and rates almost zilch. Guess I will continue to invest in med's.

For the safe money part of my portfolio, I am always on the prowl for specials in this environment like the 1 year 4% CD offer from Navy Federal (limited to $4k). I also have been putting money into I bonds as CDs mature. I think I don't have another maturity until 2014, but in the meantime keep prowling. Pen Fed seems to be the rate leader on CDs at the moment.

[haha]

We've had a long period of market stability since the recovery from the drop of late 2007-early 2009. But world and economic conditions have been anything but stable. Markets are stable solely because of manipulation. In this kind of situation, I would not like to commit new money without a much bigger discount that what is currently being offered. As we look around today it would be hard to imagine prices 25-40% lower, but that does not mean that they cannot come.

Remember the Maestro? Nothing could go wrong with the Maestro at the helm. Yet somehow things did go wrong, and truth to tell much of the ensuing instability could be lain at the feet of that very same Maestro. Mr. Ben looks to me like The Maestro raised to the third power.

Stability begets instability, and vice versa.

Ha

[Dawg52]

Quote:

Originally Posted by brewer12345 For the safe money part of my portfolio, I am always on the prowl for specials in this environment like the 1 year 4% CD offer from Navy Federal (limited to $4k). I also have been putting money into I bonds as CDs mature. I think I don't have another maturity until 2014, but in the meantime keep prowling. Pen Fed seems to be the rate leader on CDs at the moment.

Yeah, I put some in a 3 year PF CD this morning. Still hurts to 'only' get 1.6%, but better than most. So for some of my safe money, I guess it's decent.

If your prowling turns up something interesting, let us know. In the meantime, I will be sipping on a med or two. Maybe I should buy BUD. I already feel like part of the family.

BUD Basic Chart | Anheuser-Busch Inbev SA Sponsor Stock - Yahoo! Finance

[packrat44]

Quote:

Originally Posted by haha . Markets are stable solely because of manipulation. In this kind of situation, I would not like to commit new money without a much bigger discount that what is currently being offered. Ha

Similar to my feelings. I have pulled a lot off the table. There will have to be a minimum of a 10% drop from todays prices before starting to commit any new money.

[Packman]

My AA is presently 60/30/10, which is high into equities for a recent retiree, according to conventional wisdom (whatever that is). In order to reduce my concern about being too much in equities, I went back to 1928 and recorded the S&P 500 returns in a spreadsheet for all 84 years. Then I review the results whenever I get skittish.

The markets went up in 61 of those years (73%). Since 1970 the markets have been up 81% of the years. Average compounded returns over the last 10 years=2.87%. 20 years=7.82%. 30 years=11.03%. You can look at this trend and think stocks have become a loser's game, or "we're due". Take your pick!

[HFWR]

Quote:

Originally Posted by haha We've had a long period of market stability since the recovery from the drop of late 2007-early 2009. But world and economic conditions have been anything but stable. Markets are stable solely because of manipulation. In this kind of situation, I would not like to commit new money without a much bigger discount that what is currently being offered. As we look around today it would be hard to imagine prices 25-40% lower, but that does not mean that they cannot come. Remember the Maestro? Nothing could go wrong with the Maestro at the helm. Yet somehow things did go wrong, and truth to tell much of the ensuing instability could be lain at the feet of that very same Maestro. Mr. Ben looks to me like The Maestro raised to the third power. Stability begets instability, and vice versa. Ha

Still putting my monthly 457b money in, but wouldn't radically up my stock allocation without a big discount...

[wildcat]

I was mostly selling off or trimming individual positions up until this past week+. I finally initiated a new position -first one since Feb '11 - but this company's stock is already in bear market territory.

Still adding to my 401k equity funds but I'm keeping some cash ready.