LOL!'s Market Timing Newsletter

I have to own up that the last trade is now looking even worse. DGS is down about 1.1% from my purchase and MTUM is up 1.1%, so overall worse by about 2.2% over doing nothing.

Did I learn anything? I guess I really don't know how to market time. :(
 
I'm back from an extended time spent sleeping in a tent in the middle of nowhere while getting snowed on. I see I missed a little bit of a drop in the stock market, but not enough to give me any concern. It's a small consolation that MTUM is selling a little below where I last sold it because DGS is selling well below where I last bought it. The portfolio is ahead of one benchmark and behind the others, so it's hanging in there, but there is no way it could be characterized as "outperforming", so that's a disappointment.

I had to raise some spending money, so today I did a triple trade that really doesn't affect my portfolio's asset allocation at all:

1. Sell FLRN (floating rate) in tax-deferred. So far in 2019, FLRN has done better than cash, but worse than a total US bond fund.
2. Buy SPTM (total US Stock Market) in tax-deferred.
3. Sell VTI (total US Stock Market) in taxable to create the cash I need.

Net affect is that it looks like I sold FLRN in tax-deferred without paying any taxes. 698.
 
An update: It is a week like the past one that shows that one just doesn't want to sell equities "low" in taxable to raise cash without doing something elsewhere to maintain asset allocation. The SPTM (total US stock market) bought last week is up more than 4.4% since. I would missed out on that gain if I had only sold VTI in taxable and not "replaced it" in tax-advantage. 487

The double-trade of 5/31 shows to avoid emotional decisions and not worry about the price or recent movement of anything.
 
Normally, intermediate-term bond funds don't drop more than a couple of tenths of a percent in a single day, so today's 0.6% drop earlier marked a buying opportunity. I shifted some money from a short-term bond index ETF to a total bond market index ETF earlier this morning. 246

Otherwise, the portfolio has been on auto pilot and is close enough to 60/40 partly because equity funds paid their quarterly dividends back in June which knocked back the allocation to equities slightly. As for performance, the portfolio is ahead of some benchmark funds and behind some others. It is certainly not outperforming anything in any significant way.
 
I decided to sell a big chunk of MTUM a moment ago. What should I do with the cash? I'm thinking more bonds, but I could do a quick day trade at your suggestion of an ETF. Thanks! 680

Update: Here in the last 5 minutes, sold more MTUM since it was up even more and bought SPTM (total US stock market) since it was flat for the day. I didn't want to have a lower allocation to US stocks just yet. So selling MTUM early cost me a couple hundred dollars because of the pop here in the last 30 minutes, so that's not good.
 
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The numbers indicate how many thousands of dollars I expect to lose for the transactions I publish. With markets up this morning yesterday's transactions are a total bust.
 
With some of the cash still left from selling MTUM (it is still going up since I sold it! :( ) I bought some US small-cap index and quite a bit of US total bond index. 975 So once again, back to zero cash.
 
Well it has been almost 3 weeks since the last transactions and things were looking like those trades lost me money, but lo and behold after today's minor dump it means I sold MTUM higher than it closed today and the 3 things I bought (SPTM, SPSM, SPAB which are total US index, US small-cap index, and US total bond index) are all still higher than what I paid for them. So I made money!

I have to tell you all before tomorrow when everything could turn around and hurt me.
Thanks for reading! :) 077
 
I'm getting text alerts that my bond ETFs have popped by 0.8% in today's session. That's not normal, so I intend to sell some bond ETF shares later today. I'm not sure what to do with the money, so I will entertain all suggestions posted in this thread. Thanks!

Update: So on a day like today I like to sell the asset class that I own that has gone up the most intraday and use the money to buy the asset class that I own that has gone down the most. That means I submitted an order to exchange VBTLX (total US bond) into VSIAX (small-cap value index). I intend to unwind this trade in a few days or weeks by using a different account where I will sell some other US small-cap that I own to buy a US bond index. This way I avoid any frequent trading restrictions in all these accounts. The accounts are all tax-deferred, so no tax issues from the transactions. 311
 
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That last trade (bonds -> small-cap value) has not turned out so well. 619
But I can take solace that I will stay ahead of not doing anything back in early July. No plans for today, but if I do something, then I will post an update.
 
So today has turned out worse than I expected which is good for me. So I decided to buy more US small-cap value shares. I just purchased a chunk of IJS and will see if I want to exchange VBTLX into VSIAX again in about 25 minutes. 668

Update: So yes, I did exchange more VBTLX into VSIAX.
 
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The IJS shares purchased yesterday closed up for a small gain. I am now overweighted in US small-cap value equities, so I have submitted a limit order to sell the IJS purchased yesterday. I have set the limit high enough that I am not sure if the order will execute, but if there is an irrational pop I want to capture the profit right away even if it means loses out on some of the gains.

I will be watching today to sell more US small-cap if there is a nice dead-cat bounce as the amounts that I have purchased in the past few days are insane.

Update: A small slug of IJS has been sold at a gain.
 
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I can't say what's going on, but I can say that I like it. This morning I took the cash from selling IJS too soon and bought back into bonds, namely BND, because it had dropped the most this morning. Yes, I should've kept IJS a couple more days, but I've kept the extra VSIAX and met my expectations. Plus BND is up 0.31% since my purchase earlier today which is unreal on a day when equities are up 2+%.
084

How have my fellow Market Timers done in the past week?
 
I have read that some folks say, "Do the trade and don't look back!" which I think is terrible advice. I like to compare what I actually did to what would have happened if I did nothing. I think the comparison keeps me sort of honest. So I will now compare what actually happened in the past month to what would have happened if I had just held.

When small-caps and other US stocks went up 2% on Thursday, the actual portfolio was a few thousand dollars more profitable than doing nothing and just holding for the past month. Then Friday happened and small-caps dropped which would have not been so bad for the comparison except that MTUM (large-cap momentum ETF) did not drop as much. The net affect for the past month as of today is that even though I made all these rebalancing moves and bought some things low is that doing NOTHING would have the portfolio end up pretty close to where it is now. It would be around $200 lower in value. That is, the portfolio despite moving around half a million dollars of stuff around is only up $200 more than doing nothing.

MTUM closed on Friday lower than I sold it at, but SPTM, SPSM, and VSIAX also closed even lower than what I bought them at. OTOH, SPAB (bonds) made money in the the last month. I note that a 60/40 fund VSMGX (Vanguard LifeStrategy Moderate Growth) has gone down about 1.3% in the past month.

So I had fun making trades, but overall they didn't make me any real money. Thankfully, they didn't cost me any money either (at least so far). 269
 
LOL:

Like the way you analyze your trades. Thanks for sharing so we can also learn.

Best wishes,
Rick
 
Thanks! But please don't confuse learning with making money. :LOL:
 
So I get another chance this week just like last week to lose some money. I intend to sell the BND bond ETF shares I bought on 8/8 since they are up more than 0.8% and buy something. Since IJS (small-cap value) has had a tough time competing with MTUM (large-cap momentum), I think I will use the proceeds to buy MTUM. 675 I'll post an update when these trades get executed. This should be a very short-term change because I am going to sell the MTUM if it goes up even a little bit.

Update: I executed the described trades. Got the BND sold before this little drop happened at 15:02 EDT, but with my luck BND will recover and go up even higher than I sold my shares for.
 
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It's the day after yesterday's trades. No big losses before the market closes, but no gains either. The bond ETF has gone up just as much as the things that were purchased, so I could've made the trades today.

But the longer I hold these things, then the moldier they get, so I sure wish they would pop and then I could sell them.
 
Today is turning out nicely. The equity ETF purchased on 8/14 are now showing small gains in the range that I expected to get, so today I intend to sell the MTUM purchased this week and also some Total Stock Market Index SPTM (like VTI, but not VTI). I'm not really busy today, so I can watch prices and will try to sell at/near the high prices of the day. Of course, I cannot predict the future, so I'm just playing with y'all about that. Nevertheless, let's see how it works out. 939
 
It would be interesting to know how all this trading activity is paying off for you over time ... say, account balance as of 6/30/19 vs. account balance 12/31/2018. Percentage gain/loss would work if you don't want to post $ amounts.
 
It is really not that interesting because I am making about the same as my benchmarks. I'm ahead of some of them and behind others. It takes quite a lot of humongous transactions to move the dial as I explained in 3 posts starting here:
http://www.early-retirement.org/forums/f44/lol-s-market-timing-newsletter-57042-65.html#post1787189

But the short summary is: If you want to outperform your benchmark and only move 10% of your portfolio that does better than the benchmark by 10%, then you only outperform by 10% of 10% or a mere 1%. For many people 1% is in the noise.

Plus the benchmarks differ by more than 1% each year in their own right. For instance VBIAX and VSMGX are two of the Vanguard balanced funds that both have 60/40 (stocks/bonds) asset allocation. As of yesterday their YTD total returns were 12.68% and 10.46%. It is clearly better to be in the stronger performing asset class (US equities) and avoid the lower performing asset class (foreign equities), but those can switch around from year to year.

So if I make $20,000 extra on a $5,000,000 portfolio, that's a mere 0.4% outperformance and in the noise, isn't it? And even then, it is outperformance to switch temporarily from a 60/40 asset allocation to a 70/30 one? Should one's benchmark be a 60/40 fund or a 70/30 fund? How does changing risk level on the fly count?

The math is inexorable, so this is more about fun and at the same time not losing money nor increasing my taxes.
 
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OK, so your TR is about the same as if you bought and held a 60/40 benchmark, plus the entertainment value of buying and selling. Thanks.

:flowers:
 
Mr._Graybeard said:
OK, so your TR is about the same as if you bought and held a 60/40 benchmark, plus the entertainment value of buying and selling. Thanks.

:flowers:
Click to expand...
Yes, except in the years when the portfolio performance exceeds the benchmark performances by a percent or two.

I have accounts that I never trade in such as my taxable accounts and an IRA, but I have accounts that I trade in such as Roths and traditional IRAs. The traditional IRAs are meant to have 100% bond funds in them. So if I 3 or 4 times a year switch them temporarily to equities and then handily outperform the return of a bond fund, what does that mean? It is not fair to compare the performance of such an account to the performance of a simple bond fund because the account did not stay in a bond fund for the whole year. It is also not fair to compare the performance of the account to the performance of an equity fund because the account did not stay in an equity fund for the whole year.
 
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Update: Sold a tranche of total US stock market at just 1 cent off the current high for the day. Every tenth of a percent counts!

And with MTUM trending higher here 15 minutes before the close, I sold all the shares purchased 2 days ago.
 
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