Is this rally for real?

[James5v]

I retired early at 55 from Federal Civil Service. As you can imagine I am not wealthy and so I am very conservative in my investments. My TSP has been completely in Government MM since I retired. I have not made much but that fund was making money while the market plunged and for that I am thankful. However, now that the market has moved up, the very small interest rate I am receiving is pushing me to take more risks. So far, I have not taken the temptation for higher returns.

 

[Zathras]

I wonder how many people that were complaining that the media was a major cause of the downfall because of their 'the sky is falling reporting' are not now complimenting the media for causing the recovery?

 

[REWahoo]

My TSP has been completely in Government MM since I retired. I have not made much but that fund was making money while the market plunged and for that I am thankful. However, now that the market has moved up, the very small interest rate I am receiving is pushing me to take more risks. So far, I have not taken the temptation for higher returns.

Why not put a portion of it into a short term bond fund such as Vanguard Short-Term Bond Index Fund ? Limited risk with much better returns than the nearly nothing MMkts are currently paying.

 

[unclemick]

Soooo - let's cut loose with a psssst - Wellesley.

ok now that's out of the way - I was talking to me Sister last night(5 years to regular retirement in her mind, hubby 5 yrs) getting the latest poop on the heat wave. So says she - hows yer retirement fund doing
? Ok says I - only down 8% nowadays. Target Retirement 2015 plus some div stocks on full auto rebalance and deduct walking around money to Prime MM.

Circa 1980 or earlier I looked around a was told the 'traditional/mythical/average pension plan by large corp America was 60/40.'

Large handgrenade or really cool horseshoe wise - that's about the ballpark I'm still in. I've kinda thrown in the towel on reading books, deep investment thinking, slice and dice(except Target) and that stuff.

Preseason is coming up - got my fingers crossed:

'God may look after Drunkards, Fools and The United States of America but the Saint's play football so they have to suit up ,show up and crush that 4th quarter curse.'

heh heh heh -

 

[Dawg52]

While you guys debate that, I'm off to do a little rebalancing.

Selling in other words.

Some have mentioned that they are almost all the way back. That's pretty good considering the S&P 500 is still off 35% from 2007's high. I rebalanced some when we were in the dumper, but I guess I didn't do as much as some. Oh well, congrats to the ones that are back!

 

[REWahoo]

Selling in other words.

Yep, selling a few equities and buying a few bonds with the proceeds.

Some have mentioned that they are almost all the way back. That's pretty good considering the S&P 500 is still off 35% from 2007's high. I rebalanced some when we were in the dumper, but I guess I didn't do as much as some. Oh well, congrats to the ones that are back!

No way am I "almost all the way back", but thankfully I'm not as "far gone" as I was on March 9.

 

[W2R]

Some have mentioned that they are almost all the way back. That's pretty good considering the S&P 500 is still off 35% from 2007's high. I rebalanced some when we were in the dumper, but I guess I didn't do as much as some. Oh well, congrats to the ones that are back!

Well, I was one of those who said that and although I did rebalance a lot in late 2008 and January 2009, remember that also I am in the accumulation phase! I am contributing the max to the TSP, and I have been back in "frugal mode" since about last September due to market events.

As of yesterday afternoon, my accounts are back to 92% of what my summer 2008 (pre-crash) financial plan said they would be at ER (if I include my future TSP contributions). Simply amazing considering what I was looking at in March.

Now, if only the Dow would continue on up to about 11,000 before I retire.... One can dream!

 

[freebird5825]

I own pretty much all mutual funds except a very minor stake in a single stock I got into in March just for fun. It is a bucking bronco and I realized that when I bought it. If it tanks, I won't get hurt since my ingoing stake was small.
I left my real retirement portfolio alone for the most part. I did some playing around with my short term portfolio DCA targets. I increased my monthly DCA (to the level I did when I was w*rking) in 4Q08 and carried it into 1Q09 and forward. My living costs are known and pretty stable, so I believe I can sustain this DCA level through end of 2009 and into 2010.
I am enjoying seeing some recovery in the "worst offenders" of my stock MFs during 2008. Nothing to make me rich, but my AA is more within my personal risk boundaries.
Now is the time for me to leave well enough alone.

 

[Moemg]

Selling in other words.

Some have mentioned that they are almost all the way back. That's pretty good considering the S&P 500 is still off 35% from 2007's high. I rebalanced some when we were in the dumper, but I guess I didn't do as much as some. Oh well, congrats to the ones that are back!

You are not alone . I am no where near back but at least .my accounts are looking better .

 

[Dawg52]

Now, if only the Dow would continue on up to about 11,000 before I retire.... One can dream!

As long as were dreaming, let's get back to 14k. But I wouldn't benefit from it as I would sell long before that.

 

[HFWR]

I'm about $90k off the low, but still around $70k from the high...

I'll take it!

 

[cardude]

I'm still down 20% from my all time high in September 2008 , but up almost 15% for this year!
I was down over 50% at my lowest point in March and was really pulling my hair out. Didn't put any money
to work at that time either because my business fell apart at the same time so I had to conserve cash. Sigh......

Most of the loss was from my biggest position, Berkshire Hathaway, but it's coming back here lately.

I have no idea if this rally is for real or not, but it sure makes me feel better while it's going on.

 

[Meadbh]

TSX up 231 points today, over 11,000. I'm taking some gains, reallocating.

 

[Zoocat]

The "beating the estimate" is a study in turning financial estimates on their heads. If you look at the estimates for Coke, Pepsi, Proctor and Gamble, Microsoft, Cat, United Technologies, McDonalds and Johnson and Johnson as expected at the market low in early March '09 for the stocks, all underperformed. However, the increase in unemployment caused most of the estimates to be lowered in June and all but Microsoft then "beat the estimate". In all the other cases, the ability to increase dividends going forward for these companies is less sure in July than in March yet despite falling sales and profits their yield are plummeting with the rise in the market.

The market is really getting excited about the stocks, but companies ability to pay dividend is being strained every day. It has been a very nice rally but all good things, I forsee abject ugliness beginning at the end of this rally.

Yes, the fundamentals just do not jive with this rally. Something smells bad to me. Anyway I agree with Running Man and with Hussman
Hussman Funds - Weekly Market Comment: Profiting from the Tooth Fairy - August 3, 2009
who says, among other things,

"Although the stock market's advance since March is taken as evidence that the economy is on the mend, the extent of that advance represents just over one-third of the prior bear market loss, which is somewhat standard (if not reliable or predictable) for bear market rallies. Interestingly, the advance since March has almost exactly matched the size and duration of the rally that followed the initial market plunge in 1929, just before the stocks and the economy suffered fresh deterioration."

 

[Zathras]

It certainly is possible.
However, the rise in stocks is not totally without reason. A number of statistics have shown things getter better, or at least, not getting worse. No, not all the fundamentals are getting better, but enough are to indicate we may well have reached bottom and are ready to climb out of this pit.
So while you may be correct and there is a large downturn, you could also be wrong.

 

[kumquat]

TSX up 231 points today, over 11,000.

 

[W2R]

So while you may be correct and there is a large downturn, you could also be wrong.

Let me check my crystal ball... Ah! You are correct. It says, "While there could be a large downturn, that may not occur. While the rally may continue with exuberance, that may not occur either."

 

[Zathras]

Hehe, W2R, I think you have the most accurate crystal ball I have heard of yet

 

[James5v]

I think I will continue my cautious ways at least for a while. I prefer to see what happens in the Fall.

BTW, I did decide to put some in Vanguard Short Term Bond Fund. Even if I loose a percent or two, I still will be making more than I was.

 

[MichaelB]

Let me check my crystal ball... Ah! You are correct. It says, "While there could be a large downturn, that may not occur. While the rally may continue with exuberance, that may not occur either."

I think just the opposite is more likely - but mine ain't crystal.

 

[audreyh1]

Wow - I really did miss the market rally watching party!

Read the whole thing - quite an interesting stroll through the recent past.

So this is where all the rebalancing is going on.

Audrey

 

[NW-Bound]

Wow - I really did miss the market rally watching party!

Read the whole thing - quite an interesting stroll through the recent past.

So this is where all the rebalancing is going on.

Audrey

Despite all the self-proclaimed affinity to Bogle's philosophy, there's always a market timer inside every investor, itching to click on "buy" or "sell". Come on over to the dark side.

Yes, market timing can be fun if one does it the "clean" way, not the "dirty" way. Remember that we are all "rebalancing" and not "trading".

 

[W2R]

Despite all the self-proclaimed affinity to Bogle's philosophy, there's always a market timer inside every investor, itching to click on "buy" or "sell". Come on over to the dark side.

Yes, market timing can be fun if one does it the "clean" way, not the "dirty" way. Remember that we are all "rebalancing" and not "trading".

There is a small group of us who like watching the market from the sidelines, cheering or groaning ! One can "Whee!!" to one's heart's content and be happy and ecstatic about market conditions without doing anything whatsoever. I know I haven't. I am still thrilled with the market recovery.

Rebalancing - - ah yes, that can be tricky if you let emotions enter the picture. Still, I would imagine that rebalancing according to objective guidelines that we have written down is still Bogle-ish since I don't recall where he would say not to have an asset allocation. Don't remember where I read the suggestion to write down my financial plan, but it does help.

Of course, nobody's perfect and the subjective can sometimes enter the picture, as happened for those of us who did *not* rebalance in March despite their criteria for rebalancing being surpassed. (There is no emoticon for it, but here you can imagine the "See no evil, speak no evil, hear no evil" monkeys as we try to pretend we didn't really SEE the market going that low on March 9th.). I am pretty sure that that kind of paralysis is not approved. This is where UncleMick's Target Retirement funds shine - - they are rebalanced for you, no matter what emotions one may have.

 

[audreyh1]

YEAH! What She Said!

Those of us who had a plan that said we had to rebalance if portfolio got X% out of whack (in either direction), track portfolio on a spreadsheet, portfolio reaches that criteria - you gotta rebalance!

Did it on the way down. Now doing it on the way up.

Audrey

 

[REWahoo]

(There is no emoticon for it, but here you can imagine the "See no evil, speak no evil, hear no evil" monkeys as we try to pretend we didn't really SEE the market going that low on March 9th.).

You didn't look hard enough...