"Winning Lazy Portfolios Using Fidelity Funds

[FinanceDude]

Well, I for one, would love to be able to avoid those pesky 1000 pts. dips.

I think 90 day Treasuries and CDs would work quite well for you...........

 

[Marquette]

I think 90 day Treasuries and CDs would work quite well for you...........

But what if I want no downside with unbounded upside potential?

 

[Art G]

But what if I want no downside with unbounded upside potential?

Every time I answer this question by stating, "review variable annuities", I realize I lose bonus bucks here, but in honesty, that's your answer.
And yes there is a cost to it, but in an uneasy market, what's it worth to you?

 

[Art G]

Nobody at Vanguard buys the S&P 500 Index fund, silly............

Put another way, in Art G "speak", why is ANYONE willing to invest in Vanguard, since their managers don't really "manage"!! Their expense ratios SHOULD be super low, since they "couch potato" things themselves.........

Is that right, Art?

Whoa now! I'm making enough enemies without disparaging Vanguard, but well......yeah, I guess so.

 

[tightasadrum]

Not to debate the majority here, but what about the other side? Technically speaking, back in October the market started giving signs of weakness, then in the week of January 4th, the market broke through the support line for the first time since July '06. Currently, the next support line is at 11,944. What we've been seeing is a correction thus far in the market, but certainly one that could be managed. It is possible to trade the market without emotion.
Wouldn't you all rather avoid 1000 pts. dips if possible?

Just one question. What is a "support line" and how is it computed? Well, I guess that's technically two questions. So double the invoice.

 

[ERD50]

Not to debate the majority here, but what about the other side? Technically speaking, back in October the market started giving signs of weakness, ....

Wouldn't you all rather avoid 1000 pts. dips if possible?

All the TA I've seen in the past seemed like magic mojo stuff to me. I've never seen anything that indicates it works. Part of the problem seems to be that no one can define what TA is. If you ask 10 chartists what this chart is saying, you get 10 different answers. Most of the answers tend to include, 'this indicates that we could be going up near term, but possibly after a down cycle, and we can't eliminate the possibility for a sideways move at this time - unless new information comes to light'.

But it may be ignorance on my part. I'd be very interested in seeing some concrete evidence of a technique that works. The best evidence would be from a mutual fund manager that uses a TA strategy that consistently beats the risk-equivalent index in up and down markets.

If you can provide that, please start a new thread, and PM me in case I miss it please - I would be interested.

-ERD50

 

[FinanceDude]

Every time I answer this question by stating, "review variable annuities", I realize I lose bonus bucks here, but in honesty, that's your answer.
And yes there is a cost to it, but in an uneasy market, what's it worth to you?

REWahoo and youbet will be along shortly to take you to the woodshed. How do you like hickory switches??

 

[FinanceDude]

All the TA I've seen in the past seemed like magic mojo stuff to me. I've never seen anything that indicates it works. Part of the problem seems to be that no one can define what TA is. If you ask 10 chartists what this chart is saying, you get 10 different answers. Most of the answers tend to include, 'this indicates that we could be going up near term, but possibly after a down cycle, and we can't eliminate the possibility for a sideways move at this time - unless new information comes to light'.

But it may be ignorance on my part. I'd be very interested in seeing some concrete evidence of a technique that works. The best evidence would be from a mutual fund manager that uses a TA strategy that consistently beats the risk-equivalent index in up and down markets.

If you can provide that, please start a new thread, and PM me in case I miss it please - I would be interested.
-ERD50

I used to work with a TA who was also a CFA. He charged 1% a year for his portfolios. He went to cash in mid 2000 and stayed there for quite awhile. Once in awhile clients would ask why they are paying 1% NOT to be in the market..........

 

[FinanceDude]

If you are looking for a sparring partner on this topic, I'd take it over to the Bogleheads forum. There are people there that live for this type of discussion.

Now that's funny............

 

[Art G]

All the TA I've seen in the past seemed like magic mojo stuff to me. I've never seen anything that indicates it works. Part of the problem seems to be that no one can define what TA is. If you ask 10 chartists what this chart is saying, you get 10 different answers. Most of the answers tend to include, 'this indicates that we could be going up near term, but possibly after a down cycle, and we can't eliminate the possibility for a sideways move at this time - unless new information comes to light'.

But it may be ignorance on my part. I'd be very interested in seeing some concrete evidence of a technique that works. The best evidence would be from a mutual fund manager that uses a TA strategy that consistently beats the risk-equivalent index in up and down markets.

If you can provide that, please start a new thread, and PM me in case I miss it please - I would be interested.

-ERD50

I guess I'll attach to this post since both were somewhat similar questions, but yours more complex.
It's true that many "chartists" try to use absolutely anything and everything to draw some sort of channel or trendline. In my opinion, those using short term trend lines, get short term results (which I find pretty much useless being that I'm not a day trader).
I use the 50 and 200 day moving averages (take the last 50 or 200 days of trading, look at their closing price, and divide by either 50 or 200), which are pretty simple to get in almost any program. Now, I can't say whether the reason they work is because it's a purely formed average line, or else it works because other chartists are also watching the same line, but I've been using it now for over 15 years, and it has worked out pretty well for me.
If you'd like to see what a chart looks like, merely bring up a three to five year chart, put in the criteria of 50 and 200 days, and you should see that currently we are trading between those two lines, which indicate to me, that the market hasn't currently picked a direction (I know that's useless info right now). However, once the index moves above the support line or through that current resistance line, I believe you should know whether or not you want to be holding cash, or getting invested.
I admit it's not a perfect system, but truly, if you want to see if it works, just pull up a chart right now, enter DJIA or COMP or any symbol for that matter and see if they don't at some points, hold those lines (either above or below them), and when they break through, they tend to continue breaking through.
In any case, for me it beats the heck out of waiting for someone to report how good their earnings were in the last quarter, and seeing that three weeks earlier there was very heavy volume in the stock.
BTW, all just my own opinion and research.

 

[ERD50]

ArtG - I've seen the 50 and 200 DMA lines, I think even yahoo shows those.

Any documented history that they work? I'm guessing 'NO' since you didn't give any. Seems like a pretty simple thing, any old computer could run a mutual fund and beat the market if it worked. So where are they?

-ERD50

 

[Art G]

ArtG - I've seen the 50 and 200 DMA lines, I think even yahoo shows those.

Any documented history that they work? I'm guessing 'NO' since you didn't give any. Seems like a pretty simple thing, any old computer could run a mutual fund and beat the market if it worked. So where are they?

-ERD50

ERD, did you run the chart I suggested? Or any stock? Each chart is its own documented history. Of course they work! I've traded based on them for years.
You want to see something that doesn't work? Check out a stock like Bauch and Lomb. The fundamentals sounded great, and yet the stock plummeted. Then, ooops...a lawsuit regarding the use of their product. In my opinion, fundamental investing is like playing football with an eye patch and the other team has your playbook.

 

[FinanceDude]

fundamental investing is like playing football with an eye patch and the other team has your playbook.

Well, Peter Lynch and Warren Buffett have done "ok" with fundamental investing........

 

[Art G]

Well, Peter Lynch and Warren Buffett have done "ok" with fundamental investing........

Sure, they both have the playbook.
Warren Buffet knows well in advance what's gonna happen, and often enough, he causes it to happen. I guess if I had a couple billion to invest, I could take off my eye patch.

 

[FinanceDude]

Sure, they both have the playbook.
Warren Buffet knows well in advance what's gonna happen, and often enough, he causes it to happen. I guess if I had a couple billion to invest, I could take off my eye patch.

Oh..........I see. You meant that the individual investor doesn't have the playbook..........

Actually Warren Buffett buys stuff, and THEN it leaks out that Warren is buying (intentionally) and then it causes the "Buffett effect" where crazy buying happens, and he gets the run-up just staying put.........brilliant!!!!

 

[Art G]

Oh..........I see. You meant that the individual investor doesn't have the playbook..........

Actually Warren Buffett buys stuff, and THEN it leaks out that Warren is buying (intentionally) and then it causes the "Buffett effect" where crazy buying happens, and he gets the run-up just staying put.........brilliant!!!!

Well yeah, Warren has that edge also. Not being a mutual fund also gives him the freedom not to have to report stuff. I believe Peter Lynch once got in trouble for leaking stuff?
I'd say that in individual investing, there's a bunch of stuff going on that the average investor doesn't know. We've got to be happy taking the dribs and drabs that can be achieved from careful stock selection.
Of course, (and I hate to say this here), investing in only indexes means it doesn't matter what's going on behind the lines.

 

[FinanceDude]

Of course, (and I hate to say this here), investing in only indexes means it doesn't matter what's going on behind the lines.

Which is why a lot of folks do it, they want to do as much autopilot as they can.

I own some individual stocks, and I will admit my biggest LOSSES and biggest GAINS have been in that arena.

It's pretty hard for a mutual fund to go up 1000% in a single year..........

 

[Midpack]

Well yeah, Warren has that edge also. Not being a mutual fund also gives him the freedom not to have to report stuff. I believe Peter Lynch once got in trouble for leaking stuff?
I'd say that in individual investing, there's a bunch of stuff going on that the average investor doesn't know. We've got to be happy taking the dribs and drabs that can be achieved from careful stock selection.
Of course, (and I hate to say this here), investing in only indexes means it doesn't matter what's going on behind the lines.

Ever read The Four Pillars of Investing by any chance?

 

[unclemick]

Ever read The Four Pillars of Investing by any chance?

1995 - Nephew out of Naval Academy - headed for flight school. Actually asked for my advice.

1. Learn to fly - don't waste time studying stocks.

2. Don't read books! - but read this one - 'Bogle on Mutual Funds.'

3. Max your TSP into the equivalent of 500 Index and don't waste time watching/thinking/worrying. 'God Looks After Drunkards, Fools and The United States of America.'

4. Stay alert - make sure your takeoffs = your landings.

Now after being in So Cal for a while - he slipped and read Four Pillars cause he listened to his buds - but he promised not to touch his 500 index head start or read it again. His retirement is set. You don't need to beat/outperform - you need enough to get the job done and walk away from every landing you make.

heh heh heh - took me forty years to figure that out!

 

[ERD50]

ERD, did you run the chart I suggested? Or any stock?

Sorry, thought you were saying it was forward looking, that I would need historical data on those indicators. Gotcha now. But I'm not very experienced with this. So how about you tell me - what happens next?

It's obvious, but for those unfamiliar, the blue is the stock, red the 50 day moving average, green the 200 day moving average.

I got plenty more. -ERD50

 

[Art G]

Sorry, thought you were saying it was forward looking, that I would need historical data on those indicators. Gotcha now. But I'm not very experienced with this. So how about you tell me - what happens next?

It's obvious, but for those unfamiliar, the blue is the stock, red the 50 day moving average, green the 200 day moving average.

I got plenty more. -ERD50

LOL! What a chart! What's the time frame there? Darn it, I can't post and review the chart at the same time, but if I remember correctly, the stock had just broken through the resistance line so I'd say it's moving up. However, once it breaks back down below the line I'd definitely want to be out. Rather than try to decipher that jumble, if you tell me the stock symbol, I'll look at it on a better chart and give you a better opinion.
BTW, there are times when the chart shows the stock is trading within a range and not giving an indicator as to which way its' going. In fact, the DJIA is trading as such right now. In that case, my advice is to stay away from that stock. The beauty of trading is that you've got thousands of choices, you don't have to buy them all. One more thing, in my opinion the bible of charting should be from Daily Graphs...
Investor's Business Daily: Premium Services
JMO.

 

[ERD50]

LOL! What a chart! What's the time frame there?

One year time frame. Sometime in the past.

if you tell me the stock symbol, I'll look at it on a better chart and give you a better opinion.

If I tell you the symbol, you have the answer - not much of a test of predictive powers is it? So with that chart, I know the 'future' and you do not. That was the point.

-ERD50

 

[myself]

One year time frame. Sometime in the past.


If I tell you the symbol, you have the answer - not much of a test of predictive powers is it? So with that chart, I know the 'future' and you do not. That was the point.

-ERD50

Can't you do those on Google's Finance page (or Yahoo's, or BigChart.com's) ?

 

[dex]

heh heh heh - took me forty years to figure that out!

It seems we humans need to re-discover what to do for ourselves.

 

[Art G]

One year time frame. Sometime in the past.


If I tell you the symbol, you have the answer - not much of a test of predictive powers is it? So with that chart, I know the 'future' and you do not. That was the point.

-ERD50

Well I'm certainly not afraid of an honest test. If I'm wrong, I'm wrong. Again, the key isn't so much predicting the future, as it is taking the signals that limit your losses. I find the trick to stock selection isn't when to buy, but when to sell.
Now, if you won't give me the stock, at least find me a better chart. Find me a three year chart at the very least. Either that or give me a symbol and we can revisit it in a couple months.