Thoughts on investing in current market climate

[freebird5825]

Is that REIT fund Global? I think you're way early on trying to bottom fish the domestic REIT market. JMO.

nope, domestic only. zero foreign stocks. asset alloc for VGSIX is 98.1% stocks, 1.9% cash.

very good advice on fishing. i'm already into it, over 5 years now. want2retire is thinking about it for future.

 

[W2R]

bargain basement prices rule...i have a preferred morningstar subscription, so if you need some VGSIX data, let me know.

No, I don't need any data for a fund that I have personally followed for as long as I have followed this one (and many others that I also follow...) Thanks but getting the data is just not a problem for me!

Glad you also have an interest in one of the funds I had targeted, but I don't think it's that unusual of an REIT fund to be interested in. In fact, I would guess that probably half the people on this board either have some VGSIX or plan to get some at some point in the future. I mean, gee!! It's not like I "discovered" Vanguard or VGSIX - - or maybe I am giving people too much credit, here?

EDITED TO ADD: I didn't mean for this to sound so testy!!! And wouldn't you know it, when I went back to change it, I lost connectivity and had to mess around with that forever. Anyway, my apologies if I sounded grumpy. Must be hormones (or lack of same).

 

[Art G]

Personally, I wouldn't even be considering VGSIX until it hits $16 (maybe not even then). Of course, if you're already in it, at least you're getting dividends. That's just my opinion.
I can see a value for international REIT's, but not domestic ones, at least not right now. Too much available land, too much instability amongst banks, too many questions over how to bail out companies, too many questions as to our next President and what he/she (boy that feels weird to say!) might have planned for the future.

 

[Spanky]

I can see a value for international REIT's, but not domestic ones, at least not right now. Too much available land, too much instability amongst banks, too many questions over how to bail out companies, too many questions as to our next President and what he/she (boy that feels weird to say!) might have planned for the future.

That makes more sense to invest now before all these uncertainties are lifted.

 

[audreyh1]

(domestic) REIT is an area I added to this past January, as per my asset allocation. The asset class had been beaten up so bad the previous year, I had to invest quite a bit to bring it up to balance.

It's actually done quite well since then, and is now above allocation! It has certainly done much better than the rest of my equity funds YTD!

Audrey

 

[W2R]

(domestic) REIT is an area I added to this past January, as per my asset allocation. The asset class had been beaten up so bad the previous year, I had to invest quite a bit to bring it up to balance.

It's actually done quite well since then, and is now above allocation! It has certainly done much better than the rest of my equity funds YTD!

Audrey

I can imagine! I am really happy for you, and I am looking forward to shifting my "play" account over to VGSIX. It may not be too terribly long before I choose to make that move, but maybe not just yet. Since this is in my "play" account, I might as well go with my guts instead of my AA.

UncleMick calls his "play" investments, his testosterone investments - - I don't have a whole lot of testosterone involved, but I think it is helpful to have some small account that one is free to play around with!

 

[Art G]

(domestic) REIT is an area I added to this past January, as per my asset allocation. The asset class had been beaten up so bad the previous year, I had to invest quite a bit to bring it up to balance.

It's actually done quite well since then, and is now above allocation! It has certainly done much better than the rest of my equity funds YTD!

Audrey

VGSIX was at $20.45 on 1/1/08. Today it's at $19.94. While it may be doing better than the rest of your portfolio, that's not a trend I'd want to jump into. I wouldn't want to be jumping into domestic REITS until I saw less sub prime, and more prime stuff taking a beating. Have you ever heard the expression "wait until there's blood in the streets"? The big boys won't be jumping in for a while, in my opinion.
At least for me, I'd rather be a week late than a week early. Again, this is just my opinion.

 

[Gazingus]

If you are FIRE investing for the long term, today's indigestion will be seen to be a minor glitch.

Unless of course this is the precursor to total world-order economic meltdown,...

I couldn't agree more, Mitch. If the market crashes and stays crashed, it won't matter how many bonds you have, what you'll need is horses, bullets, and fish hooks! A water well with a solar panel wouldn't hurt, either.

 

[freebird5825]

I didn't mean for this to sound so testy!!! And wouldn't you know it, when I went back to change it, I lost connectivity and had to mess around with that forever. Anyway, my apologies if I sounded grumpy. Must be hormones (or lack of same).

no problemo. actually, i thought your post was cool.

heck, i didn't even know what a REIT was 5 years ago. i think i saw it in Bogle's mutual fund book. so of course i had to go check it out.

18 years of the fed world made me an acronym junkie.

 

[audreyh1]

VGSIX was at $20.45 on 1/1/08. Today it's at $19.94. While it may be doing better than the rest of your portfolio, that's not a trend I'd want to jump into. I wouldn't want to be jumping into domestic REITS until I saw less sub prime, and more prime stuff taking a beating. Have you ever heard the expression "wait until there's blood in the streets"? The big boys won't be jumping in for a while, in my opinion.
At least for me, I'd rather be a week late than a week early. Again, this is just my opinion.

FRESX was at $24.88 when I added to it on 1/3/08. It is at $25.75 as of yesterday, so I had gained YTD.

I am an AA investor - I only care about relative performance of asset classes within my portfolio. I don't try to time the market with the "big boys".

If things get bad enough in the short term (i.e. enough blood in the streets), I'll be rebalancing my portfolio yet again, but I suspect I'll be trimming my REITs to buy other equity asset classes at that time.

Audrey

 

[DblDoc]

Another good day for those of us acquiring stocks this year.

DD

 

[al_bundy]

Another good day for those of us acquiring stocks this year.

DD

please don't stop, i plan to buy QID next week and need someone to buy the stocks they sell

 

[DblDoc]

please don't stop, i plan to buy QID next week and need someone to buy the stocks they sell

LOL. Unfortunately I'm not buying in that asset class currently

DD

 

[unclemick]

Hmmm - I sold my VGSIX(reit index), sm cap value, high yield corp - Jan 2006 because I convinced myself I was in denial - ie really chasing performance instead of trying help my core 60/40ish balanced index with low correlation asset classes.

Cold Turkey - went 100% auto - everything into Target Retirement 2015 EXCEPT:

15% mad money for individual stocks. At 13 yrs into ER - I could look myself in the mirror and admit I was bad to the bone/totally incurable/and that I might go to my grave with the Saints never having won the Superbowl.

So full auto for retirement - and wild and free for my 15%. Slice and Dice, manual rebalancing, picking low correlation asset classes and that sort of thing lead me down the slippery slope to momentum and performance chasing - de nile is not just a river in Egypt.

heh heh heh - don't know where I heard that one.

 

[al_bundy]

i personally think these target funds are a scam to keep the boomers money longer and keep collecting fees

for 30 years the financial media told us to rebalance into bonds as we get older. of course the stock fund people don't want to lose the fees, so they make up these target retirement funds

 

[Notmuchlonger]

i personally think these target funds are a scam to keep the boomers money longer and keep collecting fees

for 30 years the financial media told us to rebalance into bonds as we get older. of course the stock fund people don't want to lose the fees, so they make up these target retirement funds

You can duplicate the target funds yourself for a cheaper total expense ratio

 

[unclemick]

You can duplicate the target funds yourself for a cheaper total expense ratio

Target Retirement 2015 0.19% expense ratio, 3.07% current yield - plus early SS, plus small non cola pension meets the fundamental technical requirement for my ER - aka ENOUGH! .

With no spreadsheets for rebalancing or budgeting(just cheap habit patterns) and my trusty No. 2 pencil gathering dust - I don't even bill myself an hourly rate for my time.

Now the putz - picking a few good stocks to keep the hormones in check I put in the catagory of golf, kayaks, going to the gym etc, etc. Do not even count the hours.

Others might call it disease management.

heh heh heh - I prefer it to be a fun pursuit of the Holy Grail - sort like the mythical Jimmy Buffett's Margaritaville - although I'm not a Parrothead. Kansas City is just ducky with me - so far!

 

[al_bundy]

the point of the funds is to keep you in one fund for life rather than rebalancing into different asset classes and different funds and keep you paying expense ratios into that fund

 

[al_bundy]

calculated risk is running a story about problems in the municipal bond market. looking to put some safe money in there maybe next week maybe in the next few weeks

Vallejo, California is close to filing BK and with the problems at Ambac and MBIA there are some risks to the NAV price

 

[DblDoc]

the point of the funds is to keep you in one fund for life rather than rebalancing into different asset classes and different funds and keep you paying expense ratios into that fund

Which as UncleMick pointed out is low (at Vanguard). How much would many investors have [-]wasted[/-] spent on transaction fees etc moving their money around chasing the latest hot asset. For many these are a much better retirement investment then the vast majority of alternatives out there.

DD

 

[chinaco]

Long-term investor. I will rebalance as normal.

I continue to add to my equity position through my 401k.

The rest of our new money goes to fixed since we are preparing for FIRE in the next few years.

 

[Patrick]

So the news is not encouraging. Real estate downturn, sub prime mess, weak dollar, inflation--stagflation.

What are your thoughts on investment strategies for today?

I got out of US-dollar-denominated assets as much as possible (dollar's on the downswing and with the Fed printing money like crazy, it will probably go lower). The Fed can't keep printing money forever without it having a negative effect on the dollar. When the dollar falls your buying power disappears. If you're in US dollar assets, you may have a few more dollars after a while, but they will buy less because prices will go up. The Fed says there's no inflation - Ha! Just take a short drive to the gas pump or the grocery store.

Anyway, here's what I'm doing with my money:

I sold my S&P 500 Index fund.

I sold my REITs, which had been way down, and will probably continue to fall as the sub-prime mess expands.

I bought a gold mining fund (UNWPX), which has been doing great lately, and probably will continue to as the dollar falls and investors flee to hard assets.

I shorted the NASDAQ by buying the QID ETF.

I shorted financials with the SKF ETF.

I bought some foreign currency and energy stocks.

I'm holding my PCRDX commodities fund.

I shorted GM due to their massive debt and Yahoo because the Microsoft deal will probably fall apart.

I shorted Diebold today on my guess that Diebold will reject the takeover bid from United Technologies.

So far this mix seems to be doing pretty good.

I'm going to open a commodity futures account so I can speculate with a small portion of my assets and maybe hit the big one out of the park.

Cheers,

Patrick

 

[al_bundy]

Target Retirement 2015 0.19% expense ratio, 3.07% current yield - plus early SS, plus small non cola pension meets the fundamental technical requirement for my ER - aka ENOUGH! .

With no spreadsheets for rebalancing or budgeting(just cheap habit patterns) and my trusty No. 2 pencil gathering dust - I don't even bill myself an hourly rate for my time.

Now the putz - picking a few good stocks to keep the hormones in check I put in the catagory of golf, kayaks, going to the gym etc, etc. Do not even count the hours.

Others might call it disease management.

heh heh heh - I prefer it to be a fun pursuit of the Holy Grail - sort like the mythical Jimmy Buffett's Margaritaville - although I'm not a Parrothead. Kansas City is just ducky with me - so far!

what is the total return? vanguard says just over 9% since inception which is less than their other funds.

 

[al_bundy]

I got out of US-dollar-denominated assets as much as possible (dollar's on the downswing and with the Fed printing money like crazy, it will probably go lower). The Fed can't keep printing money forever without it having a negative effect on the dollar. When the dollar falls your buying power disappears. If you're in US dollar assets, you may have a few more dollars after a while, but they will buy less because prices will go up. The Fed says there's no inflation - Ha! Just take a short drive to the gas pump or the grocery store.

Anyway, here's what I'm doing with my money:

I sold my S&P 500 Index fund.

I sold my REITs, which had been way down, and will probably continue to fall as the sub-prime mess expands.

I bought a gold mining fund (UNWPX), which has been doing great lately, and probably will continue to as the dollar falls and investors flee to hard assets.

I shorted the NASDAQ by buying the QID ETF.

I shorted financials with the SKF ETF.

I bought some foreign currency and energy stocks.

I'm holding my PCRDX commodities fund.

I shorted GM due to their massive debt and Yahoo because the Microsoft deal will probably fall apart.

I shorted Diebold today on my guess that Diebold will reject the takeover bid from United Technologies.

So far this mix seems to be doing pretty good.

I'm going to open a commodity futures account so I can speculate with a small portion of my assets and maybe hit the big one out of the park.

Cheers,

Patrick

damn, and i'm trying to get into a US $$$$ asset as i type this

trying to buy some QID but it's too expensive compared to nasdaq's performance today. want to pay around $53.50 and it's $54.67 as i type this

 

[Patrick]

damn, and i'm trying to get into a US $$$$ asset as i type this

trying to buy some QID but it's too expensive compared to nasdaq's performance today. want to pay around $53.50 and it's $54.67 as i type this

Well, you'd be shorting the market, which appears to be a good thing at this point. Jump on in, the water's fine.