LOL!'s Market Timing Newsletter

[LOL!]

I wasn't expecting a 2.5+% gain in MTUM in a few hours. Nice!

 

[LOL!]

31 Had to rebalance a bit out of equities today after the 4% run-up since Monday.

Sold some VTI (Total Stock Market) and bought VCSH (short-term corporate bond).

 

[LOL!]

428 My wife's company paid the hefty 2017 profit sharing payment into the 401(k) on Friday, so all that went to buy the S&P500 index fund.

So while VFIAX has a YTD return of -2.11%, my wife's return is -0.88% YTD. Every little bit counts.

 

[thepalmersinking]

My market timing is simple. I have core positions in AAPL, V and a few others. I listen to the talking heads on CNBC and when they say the market is frothy, I start looking at the Covered call premiums. I carry it out 8-12 months depending on where stock is and usually pick up 2-3%. Been doing that for 5 years in traditional iras and Roth’s. I think I only had it called away once. It’s like getting a special dividend that I immediately reinvest in something else.

 

[LOL!]

I was reviewing what is going on with my fixed income assets. Back on February 18, I posted:

I was considering my fixed income assets which are composed of Total US Bond, short-term corporate bond, a 3% stable value fund, and cash. I have decided that I am going to sell most of my Total US Bond later this week in the hopes that it goes down another 0.5% to 1% over the next few months.

And since Feb 18th, the Total US Bond Index has not dropped really at all. VBTLX (Vanguard Total Bond) is actually up about 0.39% since then. But the things I bought such as BIL (1-3 month Treasuries), FLRN (ultra short floating rate), and Vanguard Prime Money Market are all up about the same (0.23% to 0.26%), so it really didn't matter what I sold and what I bought, though VBTLX did the best by a smidgeon and a T-bill has done the worst by a smidgeon.

Basically, I should've just done nothing about my bond funds back on February 18. If I look at the total return of my fixed income assets, I am doing about 0.5% YTD better overall than Total US Bond Market Index fund, but that's because of the shorter duration investments owned since the beginning of the year and not because of any market timing that I've attempted.

I've got no crystal ball for the next few months, so I intend to just stay on this course for a little while with regards to fixed income. However, if equities take a dump, I will sell BIL and buy some equity ETFs.

 

[LOL!]

623 And the tables have turned for Total US Bond index this week. As of the market close today, it is now about half-a-percent behind all the short-term things mentioned in my previous post because of the drops the past couple of days.

I have no plans to do anything yet, but that is mostly because for the next 2 weeks I will be traveling and only have intermittent internet access. I feel good about going away since the portfolio is outperforming ALL of its benchmarks at the moment.

 

[NW-Bound]

Sold a bunch of stocks and ETFs a month ago. Then, sold a bunch of put options to buy them back at lower prices.

These options came home to roost, actually they never left home, on Friday April 20th. I am going to own these shares again, and have to buy them above market price.

This is driving my stock AA back up. Oh well. Serves a guy right for proclaiming himself a stock lover. At least, I was spared from bond pain, as I have so little of that.

 

[NW-Bound]

Two weeks ago, seeing that my stock AA was getting above 70% again and not at 60% or lower as I wished, due to the mistimed put options that made me buy more shares, I sold some out-of-the money covered calls.

Stocks dropped further, and these covered calls looked even more hopelessly out-of-the-money. A contract that I sold for $3-4 a share came down to 50 cents. Usually I wait until they expire worthless, which is May 18 in this case. However, seeing that the market is bouncing back up, I decided to buy several back and closed them out.

It is not that I think the shares will get up to the strike prices, although this market is so crazy anything is possible. Giving up the remaining 50 cents/share on the existing options frees up the stocks, so that I can write covered calls again, but this time for June expiry. I am not selling anything yet though, and just have that option if I so desire.

 

[LOL!]

I bought several thousand shares of FLRN this morning with the money from selling DGS. FLRN is an ultrashort bond ETF: SPDR® Bloomberg Barclays Investment Grade Floating Rate ETF that I will try out for at least a month or so.

Since the above post back on March 12, FLRN has outperformed the other kinds of fixed income funds I use including a Total US Bond fund, a short-term corporate bond index fund, and a 1-3 month T-bill ETF (see M* 'growth-of' chart next).

I had a T-bill mature, so I used the money to buy some of the worst performing Total US Bond index fund and some more FLRN today. 292

 

[bmcgonig]

Since the above post back on March 12, FLRN has outperformed the other kinds of fixed income funds I use including a Total US Bond fund, a short-term corporate bond index fund, and a 1-3 month T-bill ETF (see M* 'growth-of' chart next).

I had a T-bill mature, so I used the money to buy some of the worst performing Total US Bond index fund and some more FLRN today. 292

There's a lot of love for floating rate bonds now as they will keep resetting upwards as interest rates rise, assuming they do.

 

[LOL!]

My equity funds have done quite well recently, so the portfolio has hit the top trigger band for allocation to equities, so I have submitted a limit order to sell some shares of MTUM a moment ago to get the asset allocation back below the trigger point. If MTUM fades from here today, then of course the order won't execute. 835

Update: Limit order executed, now I have some cash to buy some fixed income shares of some type.

 

[LOL!]

An alert was triggered that bond ETFs had dropped significantly this morning, so I am submitting a limit order to buy SPAB (Total US bond market index).

If bond funds recover even by 0.2% to 0.3% in the next week, I intend to unwind the position. 265

And it seems I almost caught the high when I sold MTUM last week. No complaints here.

 

[LOL!]

Update: Limit order to buy SPAB was executed earlier today. I may try to snag some more here in the last 4 minutes, but to do so I will have to sell some BIL (1-3 month T-bill ETF).

Update to update: Late day limit orders did not execute, but no matter.

 

[LOL!]

Sold some BIL (1-3 m Treasury ETF) and bought some SPAB (Total US Bond Index) which was what I was trying to do at the end of yesterday. 566

Interestingly, SPAB was down today, but the similar AGG and BND are up today.

Update: And SPAB trades even lower than what I paid for it. Did I ever say I like losing money?

 

[LOL!]

So the bond ETF shares I bought last week after getting that alert of a relatively large single-day drop have gone up about 0.5% since then.

Of course, bond funds don't move up by half a percent every week, so I need to start thinking about selling those shares today or tomorrow. 195

 

[LOL!]

Sold some SPAB and bought back BIL in the last 30 minutes. Submitted another limit order to sell SPAB at a couple cents higher than it is trading now.

I have more shares to unwind, but I am now not in such a hurry to do something. Let's see what happens.

 

[LOL!]

And SPAB (Total US Bond Market Index ETF) continues to go up today, so exchanged another tranche of SPAB back into BIL (1-3 month T-bill ETF). 355

 

[LOL!]

And total bond index ETFs continue their rise. They are up more than 1% since mid-May. I submitted a limit order to sell another tranche this morning, but I'm not sure if it will execute since I think limit price is optimistic, but there is a chance. 878

If this executes, it is likely that the money will go to buy equities which are not doing well today.

Update: Look at that! Order executed, so I am now thinking I should sell another tranche.

Update to update: Submitted another limit order to sell bond ETF shares.

 

[LOL!]

I am dumbfounded. I can't recall the last time a total bond index fund was up more than 0.75% in a single day. And there is time to go higher still.

Equities have not dropped enough to get me to buy, but they are close.

 

[COcheesehead]

I am dumbfounded. I can't recall the last time a total bond index fund was up more than 0.75% in a single day. And there is time to go higher still.

Equities have not dropped enough to get me to buy, but they are close.

Its a very rare day. Bonds are killing it, but what happens next?

 

[LOL!]

Its a very rare day. Bonds are killing it, but what happens next?

You may have noticed that I don't really make predictions, but simply react to what happens on any given day.

So I sold off all the bond shares bought earlier in May. I did not buy equities since they had not dropped enough, so I will have to hold cash at least overnight. Even the MTUM that I sold earlier in May did not drop enough.

Despite all the good things happening, my portfolio will not do as well today as the benchmarks I compare it to. I think the portfolio is enough ahead of them that they won't catch up just on today's change, but I won't know until all the numbers are in later this evening.

 

[LOL!]

Decided to buy a big slug of DGS (small-cap EM dividend) ETF. I need more international and was underweight in EM, plus it dropped today when just about everything else went up. In addition, I can sell some DGS in another account without a commission avoiding a short-term transaction fee if this new purchase goes up in a day or two. 567

 

[LOL!]

I didn't expect DGS to go up first thing this morning, so I have submitted a limit order to sell in another account the same number of shares I bought late yesterday. If it executes, then no commission and no taxes. 712

Update: with everything fading in the past few minutes, I just switched sell limit order to a market order and it executed in the top half of the bid/ask spread. I'm practically day-trading!

 

[LOL!]

And sold DGS too soon today, but no matter since the bond fund I sold last week to get the money to buy DGS yesterday in the first place dropped in value by about 0.7% since then. I'm feelin' pretty good.

 

[LOL!]

And sold DGS too soon today, ....

Ha! Based on this morning's drop in the price of DGS, maybe I didn't sell too soon after all?

Some bond ETF dividends got paid today, so I just re-invested them manually since bond ETF prices have dropped nicely in the past week.