For the first time ever I sold all my stocks

[corn18]

I disagree. Most famous market timers are billionaires. They just know how. Most people don't.

Example...Bill Achman recently made $2 billion shorting the market.


Click

https://www.cnbc.com/2020/03/25/bil...made-to-buy-more-stocks-including-hilton.html

What about Warren Buffet? Peter Lynch? Jeffrey Gundlach?

Recently, most billionaires have increased their cash position. I like to do the same since I am currently 70% treasuries.

Go ahead and believe that the room of market timers is an empty one.
There is a reason why some people get rich in the stock market and some people don't. As far as buy and hold and never try to time the market, that strategy is OK for people who do not know how to play the game.

The classic I'm smarter than you argument.

 

[tdv2]

Pop quiz: When is a good time to invest $10K in S&P500 and invest $10K in shorting the S&P500 at the same time?

Only an experienced investor knows the answer to this pop quiz question.....

Answer: Right now. If the market decline, you make money on the short position in the short term. You make money on the other S&P500 investment after the market recovers in the long term.

Good luck to you....I'm done.

 

[pb4uski]

Nope...I am just getting rich from him. Gundlach's net worth is $2 billion dollars from scratch. I tend to listen to successful people.

So you must really listen to Warren Buffett since his net worth is over $70 billion.

 

[COcheesehead]

Nope...I am just getting rich from him. Gundlach's net worth is $2 billion dollars from scratch. I tend to listen to successful people.

You are not listening to me.

 

[Shredder]

I'm another poster who hasn't got back in yet. Im currently in short term govt bonds. My investment guru is covid 19, lol.

 

[targatom2019]

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.

you missed the opportunity at Dow 18K. Funny I did exactly opposite as you going from 60/40 to 96/4 at Dow 18k and now up way up enough to cover 2 years of expenses.

 

[2177V]

The classic I'm smarter than you argument.

Similar to "Billionaires are smarter than clueless investors".

 

[2177V]

you missed the opportunity at Dow 18K. Funny I did exactly opposite as you going from 60/40 to 96/4 at Dow 18k and now up way up enough to cover 2 years of expenses.

I did change from 100% treasuries to 30% equities/70% treasuries when the Dow hit 18K or 30% drop which was part of my plan: 10% drop=10% equities, 30% drop=30% equities. 96/4 is too risky to me so I admire your risk tolerance which is a lot higher than mine.

 

[VanWinkle]

Similar to "Billionaires are smarter than clueless investors".

If you are a billionaire, congrats and more power to you.

If you're not, quit bragging about how great of a market timer you are.

No one likes a bragger, especially us clueless investors..........

 

[Chuckanut]

This is somewhat off topic since it is about selling bonds, but I thought it fit well with this discussion.

Today, I sold all my medium and long term bond funds. The exceptions are my short term investment grade bond funds, and Vanguard Wellesley. And I may sell Wellesley but I want to take a good look at their bond holdings first. With interest rates at record lows and bonds near their high points I thought it is a good time to take my profits and run. The money is in MM funds for the time being.


FWIW, a while back I sold some international stock fund shares that I was not happy with and booked the losses.

 

[corn18]

This is somewhat off topic since it is about selling bonds, but I thought it fit well with this discussion.

Today, I sold all my medium and long term bond funds. The exceptions are my short term investment grade bond funds, and Vanguard Wellesley. And I may sell Wellesley but I want to take a good look at their bond holdings first. With interest rates at record lows and bonds near their high points I thought it is a good time to take my profits and run. The money is in MM funds for the time being.


FWIW, a while back I sold some international stock fund shares that I was not happy with and booked the losses.

I did the same thing right after the market crash. Still 60/40, but the 40 is in a stable value fund in my 401k instead of a bond index fund. It's returning 1.95% for now, so that works for me. It's kindof weird because I was ok with the 30%+ drop in equities, but a possible correction/bear in bonds freaks me out.

 

[2177V]

I'm another poster who hasn't got back in yet. Im currently in short term govt bonds. My investment guru is covid 19, lol.

Short term government bonds are very safe so I agree. I am into long term government bonds which carries a higher risk but higher reward. This is based on my experience during the great recession. I suggest you keep your short term government bonds but you should simply monitor long term government bonds to get some experience during this bear market.

When I was young, my portfolio over the years were 90% passive index funds and 10% active investments which I got experience. I learned hardly anything about investing in passive index funds. Most of my experience and knowledge came from the 10% active investments.

Here is an interesting article on the barbell strategy by Nassim Nicholas Taleb....

https://www.investopedia.com/articles/investing/013114/barbell-investment-strategy.asp

I also found short term government bonds and long term government bonds do compliment each other as Taleb suggests....while intermediate term bonds does not make sense. I agree with Taleb on this point.

My portfolio of 90% passive index funds and 10% active investments are very similar to Taleb's argument of a 90% ultra safe investment being balanced by a 10% high risk high reward investments in the link below.

I do not follow Tabel very much but after I read a little about him, I discovered that his investment strategy and my investment strategy are somewhat similar. This is by accident and probably coincidental.

https://toc.net/2019/10/27/nassim-talebs-barbell-investment-strategy/

Bottomline: Keep your short term government bonds....but learn how the higher risk long term government bonds work. Example: Imagine buying 1000 shares of long term government bonds this week and learn about how the value of long term government bonds changes for the rest of 2020.

 

[COcheesehead]

I did the same thing right after the market crash. Still 60/40, but the 40 is in a stable value fund in my 401k instead of a bond index fund. It's returning 1.95% for now, so that works for me. It's kindof weird because I was ok with the 30%+ drop in equities, but a possible correction/bear in bonds freaks me out.

If you buy and hold individual bonds, you have 0 interest rate risk because a bond has a par value and a bond fund does not. So you can get NAV erosion from a fund, not from an individual bond. Without a default, it will return to par as it matures.

 

[2177V]

You are not listening to me.

 

[corn18]

If you buy and hold individual bonds, you have 0 interest rate risk because a bond has a par value and a bond fund does not. So you can get NAV erosion from a fund, not from an individual bond. Without a default, it will return to par as it matures.

Not sure I'm ready to hold individual bonds. I'm good with my stable value for now. I do have access to the TSP G fund, so that may be an option later. My retirement model uses 2% real return on my 60/40 portfolio, but the fixed income side is a drag right now.

 

[LRDave]

We have been substantially out of equities since February 20. We still hold about 10% equities. The small equities portion plus about 23% of our assets in plodding but predictable TIAA Traditional has resulted in us "holding serve" compared to inflation and very little volatility.

I am waiting for some sign of improvement on Covid, plus I think I will sit things out until November passes.

 

[JustVisitingThisPlanet]

With apparently $5 Trillion sitting in money markets those eager to get back in will keep the market propped up but as usual headlines/emotional events will probably cause occasional significant drops, which will be opportunities for those eager to get back in. But the economy could still suck for a long while. That is many w/out jobs and/or many making less than before COVID. Seems to build the case that the market isn't really tied to the economy.

 

[2177V]

If you are a billionaire, congrats and more power to you.

If you're not, quit bragging about how great of a market timer you are.

No one likes a bragger, especially us clueless investors..........

I am a billionaire. But in Korean Won. Winners tend to brag. It is really human nature. You see that in sports a lot. Sport fans, who did not win, do not like it either.

 

[audreyh1]

This is somewhat off topic since it is about selling bonds, but I thought it fit well with this discussion.

Today, I sold all my medium and long term bond funds. The exceptions are my short term investment grade bond funds, and Vanguard Wellesley. And I may sell Wellesley but I want to take a good look at their bond holdings first. With interest rates at record lows and bonds near their high points I thought it is a good time to take my profits and run. The money is in MM funds for the time being.


FWIW, a while back I sold some international stock fund shares that I was not happy with and booked the losses.

What are you going to do with the proceeds?

 

[2177V]

We have been substantially out of equities since February 20. We still hold about 10% equities. The small equities portion plus about 23% of our assets in plodding but predictable TIAA Traditional has resulted in us "holding serve" compared to inflation and very little volatility.

I am waiting for some sign of improvement on Covid, plus I think I will sit things out until November passes.

I agree. November is after the election and we should have less uncertainty by then.

 

[pb4uski]

...Winners tend to brag. It is really human nature. You see that in sports a lot. Sport fans, who did not win, do not like it either.

No. There are a small minority of winners who tend to brag... they often fade away after their 15 minutes of fame. Then there are winners who don't brag and are relatively humble given their great accomplishments and they tend to stand the test of time.... like Tom Brady and the New England Patriots or Derek Jeter and the NY Yankees, as examples.

 

[REWahoo]

Winners tend to brag.

Not the classy ones.

 

[Chuckanut]

What are you going to do with the proceeds?

A good question indeed!

Short term bond funds for now, and I will hunt around for 1-3 year CD's that have rates that approach the inflation level.

Part of my reasoning is that this CV19 pandemic may not go away as quickly as we would like and thus our recession may hang on longer producing a questionable investment market. I just don't see quality bonds being a good bet these days. I may be wrong.

 

[RetiredAtThirty-eight]

I am in my late 60s and I have been buying mutual funds for almost 40 years. I have had a stock fund/bond fund allocation that I have stayed with through thick and thin--through all the recessions, through 9/11, etc. But today I sold all my equities and moved the money to a money market fund for now (it was all in my IRA so no tax consequences). I have never been a market timer but there is something about the market now that just does not seem right to me. I recouped all most all my losses from March and April and just got out. I don't see anything good to come in the near future and at my age I just decided to not take any more risks.

I will decide what to do with all the money market funds in the near future--CDs? Bonds? Treasuries? but I just don't think stocks are the right place for me to be now.

There is an old saying that's worth it's weight in gold:

Time in the market beats trying to time the market.

My brokerage account is up 68% YTD and would be up more but I'm 40% in cash (still hoping to pick up some good companies on sale but the waiting is painful).

Not bragging, just the facts. In fact, I'm ashamed of being 40% in cash!

 

[harley]

If we're trading old sayings, how about "If you've already won, you don't need to keep playing the game".