For the first time ever I sold all my stocks

[richardf]

Excellent move, cash is the best. I’m about 1/2 into cash. I think taxes are the lowest they are going to be for a long time so maybe I’ll dump the rest.

[2177V]

Quote:

Originally Posted by richardf Excellent move, cash is the best. I’m about 1/2 into cash. I think taxes are the lowest they are going to be for a long time so maybe I’ll dump the rest.

I agree. Cash is king during a risky pandemic. I reallocated my portfolio from 60/40 to 100% treasuries in 2019 because the yield curve inverted and Jeffrey Gundlach stated that 2019 is an asset preservation year. This is my best bear market ever because VUSUX 1 year performance is +25% and having treasuries are like having cash.

I am 30% stock which I had purchased after the market had declined 30% after the first crash in late March. I am in prime position to buy more stock with my 70% treasuries when I expect the market to crash a second time at the end of this year due to the election and second wave of the pandemic.

[Markola]

Quote:

Originally Posted by vchan2177 I agree. Cash is king during a risky pandemic. I reallocated my portfolio from 60/40 to 100% treasuries in 2019 because the yield curve inverted and Jeffrey Gundlach stated that 2019 is an asset preservation year. This is my best bear market ever because VUSUX 1 year performance is +25% and having treasuries are like having cash. I am 30% stock which I had purchased after the market had declined 30% after the first crash in late March. I am in prime position to buy more stock with my 70% treasuries when I expect the market to crash a second time at the end of this year due to the election and second wave of the pandemic.

But 2019 turned out not to be an “asset protection year.” It was an enormous bull market. How did your market timing perform over 2019 and 2020 YTD?

[COcheesehead]

Every financial board I participate in has a prevailing notion by many members that the market is going down again in the 2nd quarter and then again at the election.
So neither will happen because everyone “knows” it’s going to happen. Those things are baked into the market already. The train has left the station. Just stay on it, it will get you to where you want to go. Choo, choo.

[karen1972]

Quote:

Originally Posted by COcheesehead Every financial board I participate in has a prevailing notion by many members that the market is going down again in the 2nd quarter and then again at the election. So neither will happen because everyone “knows” it’s going to happen. Those things are baked into the market already. The train has left the station. Just stay on it, it will get you to where you want to go. Choo, choo.

Some of it is baked in but do you really know how many evictions are baked in? With the delays in certain states going to the next phase there will certainly be more people running out of unemployment checks and without that extra boost will not be making mortgage/rent payments. Then there is the corporations that loaded up on debt because it was "cheap" and everything was booming... that is just a ticking clock there. Lots of balls still up in the air, I wouldn't call anything settled yet. I'm sure everyone will be watching to see what the next stimulus drop will be.

[COcheesehead]

Quote:

Originally Posted by karen1972 Some of it is baked in but do you really know how many evictions are baked in? With the delays in certain states going to the next phase there will certainly be more people running out of unemployment checks and without that extra boost will not be making mortgage/rent payments. Then there is the corporations that loaded up on debt because it was "cheap" and everything was booming... that is just a ticking clock there. Lots of balls still up in the air, I wouldn't call anything settled yet. I'm sure everyone will be watching to see what the next stimulus drop will be.

Famous sayings to live by now.

Don’t fight the Fed.
Best time to plant a tree was 30 years ago and today.

After 35 years of investing experience, I can tell there is never certainty in the short term, but almost certainty in the long term.

[2177V]

Quote:

Originally Posted by Markola But 2019 turned out not to be an “asset protection year.” It was an enormous bull market. How did your market timing perform over 2019 and 2020 YTD?

You mean asset preservation year. You can't time the market to the exact day. Here are the VUSUX (Lg term treasuries) versus VFIAX (S&P500) performances:

2019 +14.83% vs +31.49%
1st qtr 2020 +20.86% vs -19.61%
2nd qtr 2020 +0.47% vs +20.54%
1 year +25.41% vs +7.47%

Since I reallocated 1 year ago, it is really the 1 years comparison that counts in my portfolio. Looks like I am ahead +25.41% vs +7.47%.

The 2019 performance does not count because I did not buy VUSUX on 1 Jan 2019 and sold 31 Dec 2019. I am also ahead in 2020 but it is really the 1 year performance that is relevant since it captured 6 months of 2019 (when I reallocated) plus the 6 months of 2020.

For the future: I believe that S&P500 is now overpriced due to the composite PE ratio of the S&P500 companies. S&P500 will decline since the "earnings" of the PE ratio will be declining due to the pandemic. When the PE ratio explodes, investors hesitate to buy companies with huge PE ratios.

[harllee]

Quote:

Originally Posted by COcheesehead Every financial board I participate in has a prevailing notion by many members that the market is going down again in the 2nd quarter and then again at the election. So neither will happen because everyone “knows” it’s going to happen. Those things are baked into the market already. The train has left the station. Just stay on it, it will get you to where you want to go. Choo, choo.

We won't know the impact of the second wave, the election, the drop off of unemployment payments, the evictions, the foreclosures, etc until months from now. Check back then and we will see if the train is in reverse. No one can predict what will happen to the stock market but those of us who have gone to cash at least can predict the amount of our cash. In addition I can sleep at night without waking up in cold sweat worrying about the stock market. Whoo, Whoo!

[COcheesehead]

What history says...
https://www.cnbc.com/2020/07/03/hand...continues.html

[Tiger8693]

Quote:

Originally Posted by COcheesehead What history says... https://www.cnbc.com/2020/07/03/hand...continues.html

After skimming it, I'm not sure what this is saying....

[COcheesehead]

Quote:

Originally Posted by Tiger8693 After skimming it, I'm not sure what this is saying....

Pretty good chance we continue higher.

[Tiger8693]

Quote:

Originally Posted by COcheesehead Pretty good chance we continue higher.

I'm on board with that!

[2177V]

Here is a recent video on Jeffrey Gundlach...

https://www.youtube.com/watch?v=Hv9ZS5YmONU

To summarize:

1. Fed is holding up the market but there is a higher risk of holding fix income assets.
2. Fed does not support negative interest rate.
3. Fed will suppress treasury interest rates to manage national debt.
4. Dollar may decline due to the higher federal debt. This impacts US investors holding overseas stocks and bonds.
5. V shaped recovery is highly optimistic and not plausible.
6. Recovery may not happen in 2020 and 2021 due to unemployment.
7. A third political party may emerge after this election.

[COcheesehead]

From the same guy who said he is shorting the market...2 months ago.

[2177V]

Quote:

Originally Posted by COcheesehead From the same guy who said he is shorting the market...2 months ago.

You are the only one I know who make investments based on a 2 months time horizon.

[COcheesehead]

Quote:

Originally Posted by vchan2177 You are the only one I know who make investments based on a 2 months time horizon.

The point, that went over your head, is the guy is a manipulator at best and wrong at worst.

[kevdude]

I'm curious if those that went to cash or sold a good portion of their stock positions earlier in the year are happy with their decision. And of those that did if they started buying back in.

I came close to doing so at the beginning of April, but could not bring myself to do it. And this was after buying a fair amount of stocks in late February and late March at what turned out to be the bottom of the market so far. One of the reasons I decided not to sell, silly as it may sound, is I didn't want to have a lot of short term losses without having the short term gains to offset.

[pb4uski]

Quote:

Originally Posted by kevdude I'm curious if those that went to cash or sold a good portion of their stock positions earlier in the year are happy with their decision. And of those that did if they started buying back in. ...

I think it is way too early to tell. I still believe that this recession will be worse than 2008/2009 but not as bad as the Great Depression and that since pre-covid that ~70% of the economy was consumer spending that unemployment is a key metric to watch.

I sometimes have a FOMO and will concede that the resilence of this market is perplexing given the obvious economic malaise. I think there is a lot worse to come and that a V-shaped recovery is wishful thinking and that the recovery will be years and not months.

I did buy some SWAN in early May.

It will be interesting to see how second quarter corporate earnings emerge.

[tdv2]

Quote:

Originally Posted by vchan2177 Here is a recent video on Jeffrey Gundlach... https://www.youtube.com/watch?v=Hv9ZS5YmONU To summarize: 1. Fed is holding up the market but there is a higher risk of holding fix income assets. 2. Fed does not support negative interest rate. 3. Fed will suppress treasury interest rates to manage national debt. 4. Dollar may decline due to the higher federal debt. This impacts US investors holding overseas stocks and bonds. 5. V shaped recovery is highly optimistic and not plausible. 6. Recovery may not happen in 2020 and 2021 due to unemployment. 7. A third political party may emerge after this election.

You say you got bought back into the market in late March---30% equities. Then you post on 5/1 the quote below in a bond discussion thread that you are short the equity market.

Which is it Can't take what you say seriously anymore.

Quote:

Originally Posted by vchan2177 Whatever. FYI. I decided to short the market by buying shares of RYURX on my non-IRA Etrade account. This is because Jeffrey Gundlach has announced that he is shorting the market and Warren Buffet has increased his cash position. The S&P500 is way too high in my opinion with the large unemployment applications and the shelter in place is causing some long term economic damage. I also read that Wuhan has opened their economy but people are still scared and there is no bounce in China's economy. Once USA opens up their economy I expect something similar. When investors realizes that we are in a recession, the market will decline. At that point, I will sell my shares of RYURX and make a profit. I put money to back up what I believe in. This is how I missed the bear market by reallocating from 60/40 to 100% treasuries in 2019. VUSUX's 1st quarter 2020 return is +20% during the crash and I am one of the few people who is making money during this bear market with treasuries in my IRA. Treasuries were also recommended by Jeffrey Gundlach in 2019. I am a gambler by nature and I do this to make my life more exciting. We will see what happens next.

[kevdude]

Quote:

Originally Posted by pb4uski I think it is way too early to tell.

I guess I should've reworded my post. I know it's way too early to tell if it was a good idea or not. I was just wondering what people's thoughts were, such as your potential for FOMO and if that caused them to get back in or be content with holding on to the cash.

I hope you let us know how your SWAN investment does once in a while. I read some similar ideas on Bogleheads both with leverage and without.