Hi folks,
Old_Skeet is pondering where now might be a good time to throttle equities back a bit and continue to raise cash within his portfolio given that fourth quarter earnings outlook for the energy sector are becoming of a concerning nature.
Currently, I am operating well within my asset allocation ranges and I am not talking about a massive asset movement within my portfolio … but, I just might lighten equities up by about five percent sometime in January and raise my cash by a like amount. I am strongly thinking that throttling back my allocation in my equities just might be warranted after we close the books on 2014.
I have felt for the most part that the time to sell down equity was in a good upward run rather than a rush to for the exits when a good number all are seeking it. For me, these are the times that buying opportunity emerge.
Is anybody else thinking along these lines?
Old_Skeet
Comments
Yes, I follow seasonality to a certain extent; but, I also follow some technicals from time-to-time. With this, I plan to let my indicators lead my direction while seasonality prevails. Naturally, I don’t want to exit too early nor late either. Since, my October 2014 spiff equals about five percent of my portfolio this would be what gets trimmed and it can be done in stages and in various ways. For example for every twenty five point gain in the Index I could reduce the spiff by about twenty percent and repeat until it has been completely sold out; and, should a set up appear indicating that a swoon might be coming then I could sell the spiff off in bulk fearing a pullback or downdraft might be on the horizon.
Thanks LLJB for making your comment. It is appreciated.
Old_Skeet
Surely you jest.
I follow a biblical trait within my portfolio and that is to harvest seasonal investment positions just as a farmer would his crops before they wilt. In addition, it follows some other biblical and religious facets. With this, I have provided a link that covers a Biblical philosophy about investing, getting good counsel, planning ahead and diversifying.
And, beyond that, today is December 22nd the day of a new moon where if one is following a lunar type buy & sell strategy then they would sell the new (strength) and then around January 4th they would buy on the full moon (weakness). Hey, it does not work all the time but it seems to work more times than not.
http://www.biblemoneymatters.com/bible-verses-about-investing/
Comment: I started to not post this as perhaps it does not fit with everyone’s beliefs and outlook on life. But, I am somewhat of a thick skin person … and, if there are those that wish to take issue with my position, beliefs, and general outlook on life have at me.
Old_Skeet
Additional Comment: For those that might want to take a closer look at a lunar trading strategy I am providing the link below.
http://lunatictrader.com/?Moon_Cycles:Lunar_Phases
My point to Dex was that very few here let their investments run year after year without modification. (I certainly don't.)
I think all of our discussions here about "raising cash", buying a fund or sector, "selling in May", "locking-in" gains, "stopping out" of a position, "overweighting" this or that area, and "taking a (tax) loss" have some element of market timing to them.
The term has, unfortunately, acquired some negative connotations - mostly undeserved. Some of these arose due to Elliot Spitzer's and other investigations into fund improprieties around 1999. Fund families, too, like to preach the gospel of buy and hold (but one could surmise, they have a vested interest in keeping us put).
So ... No criticism intended from this corner. Others can speak for themselves.
My intent was not to attack Dex ... but, to further explain my thinking. There are many strategies that one can employ in investing ... Take the lunar strategy for example. Is it market timming ... or a strategy? Just as in the seasonal strategy ... Is it market timming or a strategy? Just in Biblical teachings ... Are these teachings market timming or perhaps a strategy to govern one's life?
Happy Holidays & Most of All ... Merry Christmas!
Old_Skeet
Personally, I've turned into much more of a "buy and hold" investor in the last few years from the standpoint of it's just not very enjoyable to me to have to frequently rebalance and tweak.
There may be some variation in the desired holding periods for me, ranging from multi-decade (railroads fall within this, as well as some other things including Archer Daniels, International Flavors and Fragrances and Jardine Matheson), to 5-10 year (Ecolab, Visa, WP Carey as examples) and a lot that I have a 3-5 view on.
Things change, absolutely, but I think the Buffett quote of "Buy what you would feel comfortable with if the market closed for 10 years" is a good filter in the decision making process.
Wishing you all the Merriest of Holidays a Happy and prosperous New Year.
Time now to trudge back in the woods and chop down our Christmas tree which we'll be trimming this evening.
For me, market timing is used mostly by day traders in an attempt to profit from buying and selling rapidly to take advantage of small price changes. This, to me, has some serious drawbacks as these repeated transactions result in higher trading cost and getting the direction right at the right time is extremely difficult within the very short time frame in which they trend to open and close out positions.
Now days, day traders are not only positioning for the very short term price movement in a security they are taking on the high frequency crowd that no doubt has a greater advantage over the traditional day trader due to their higher speed computers that trade in milliseconds and price scalp many transactions and usually do not carry over any open position overnight.
What is it? I guess depends on one's own defination. For me, what is important is the short time period that a security is held which is usually only minutes, perhaps a couple hours, and I guess it might be extended on out to a few days but certaintly not a full week that classifies market timming as the shortest form of trading.
Old_Skeet
2 Timothy 3:1-5 ESV
But understand this, that in the last days there will come times of difficulty. For people will be lovers of self, lovers of money, proud, arrogant, abusive, disobedient to their parents, ungrateful, unholy, heartless, unappeasable, slanderous, without self-control, brutal, not loving good, treacherous, reckless, swollen with conceit, lovers of pleasure rather than lovers of God, having the appearance of godliness, but denying its power. Avoid such people.
2 Corinthians 11:14 ESV
And no wonder, for even Satan disguises himself as an angel of light
Thanks for your comment that brought out comments from others.
I guess, market timing boils down to ones own definition. Seems some think of it as inappropriate trading in mutual funds after the markets have closed although this is not my defination.
Wishing you ... Happy Holidays and most of all a Merry Christmas
Old_Skeet
I'm getting you close see if you can get the Definition.... anyone?
The defination(s) that I used come from published authors ...
Where does your's come from?
Old_Skeet
I follow the 20/50/100EMAs, and the charts for the following continue to be strong and I would not fight the trend: SPY, IJH, IWM, XLK, VHT, IBB, FBT, XLU and VNQ. Foreign developed and EM equities continue to lag, and I would avoid investing in these spaces.
Also, I follow the Barchart Opinion for these ETFs. Again, positive on the previously listed ETFs.
Finally, take a look at the Fear & Greed Index, which currently indicates a bullish "Fear."
My plan is to stay fully invested until the charts of my holdings break down.
Kevin
I have followed the Barchart opinions, too.
Per your link, do you give more attention to any particular indicator(s) or just to the overall "buy, sell, hold" ratings?
I also use Stockcharts for 10 & 39, and 50, 100 and 200 moving averages; and related RSI 14 values.
I, too; agree relative to the U.S. equity areas.
Thank you for your input and time here.
Catch
For LT positions, I focus mainly on the overall average. For ST, speculative trades, I focus on the ST indicators.
Main concepts are to not fight the trend, and to have a clear, and predefined exit plan for speculative, ST positions.
Merry Christmas to you and your family.
Kevin
SP500 up 14.5% YTD. How many of us can claim that? Not me, I'm up YTD only 2-3%.
Although, volume seems a little skittish...
It is interesting how well SPY and AGG have done on a total return basis this year. Currently, I have only four equity funds that have bettered SPY. They are IACLX, VADAX, TOLLX & THOAX. In my inomce sleeve which consist of a good number of short duration funds AGG has bettered all but one (NEFZX). Overall I am up year-to-date about 6.8% while my bogey the Lipper Balanced Index (LBI) is up about 7.8%. This is due to my greater allocation to foreign securites which are not generally found in the LBI. At times, I lead my bogey and at times it leads me. Sometimes, this is what diverfication does. However, the yield/distribution on my portfolio this year will approach about five percent and this is by far the better income generator over both SPY and AGG.
Thanks for stopping by and making comment.
Old_Skeet
Getting back to this general topic, I intend to remain close to fully invested in equities. The economy seems to be picking up speed, not slowing down, so I don't see any reason for a bear market any time soon. And as to the inevitable 5-10% corrections, I've learned that I'm not smart enough to time those, though I do have a little dry powder just in case some bargains appear.
Thanks for stopping by and making comment. The reason I made this post is I am looking out towards mid January when fourth quarter 2014 earnings will began to be reported. I am thinking the outlook for the energy sector will disappoint for many investors which will weigh on the overall equity markets and we will perhaps see a good dip, pullback or even a downdraft present itself. There is always perhaps a not so associated with this call.
Since, I am currently overweight equities from my neutral position I am thinking of trimming after we get into January as I am looking for another percent or so to come for the S&P 500 Index before year end. I am thinking the first week on January will also be a good week but after that I am thinking things will slow and that’s when I am thinking of trimming.
I can do this in steps as the market moves upward, or downward, or in bulk at the time of my choosing. I also think that for 2015 we will perhaps see another 8% gain on the Index although the ride will be a bumpy one. With this anticipated volatility I plan to make some more special spiff investment positions and to profit form this I will have to buy low during market declines and sell high towards market peaks. I plan to do this in a tax deferred account and in funds that I can buy at nav. Some might say this is market timming (as Dex at first did) ... however, by my defination it is not as I am not a day trader nor am I buying inapporiately in mutual funds after the markets have closed and outside of what is allowed by fund prospectus. This type of investment strategy would be called by some as simply playing the swing.
You now have my playbook exposed prior to the anticipated events as some have said I have failed to do in the past in posting past successes. I do this in the spirit of helping others with some insight to my thinking. However, one should do their own thinking and not rely on mine because I have been know, at times, to have missed calls. And, yes, this is hard to do as the market changes and at times is not in concert with my playbook. And, with this I have to remain flexible. But, if one fails to plan then they have planned to fail.
Wishing all the best for the Holiday Season and most of all … Merry Christmas!
Old_Skeet
One day the Great Pumpkin will come to we loyal investors in FAAFX
Fortunately, DODGX, did well. I remain fully invested (thanks for AKAFlack) versus DODGX/DODIX split...and will stay so as long as 10-mo SMA is positive.
And, had couple individual stocks that have done well. Thanks to Ted for helping me double down on BAC. Ditto to Scott wrt/OAK. AA and HCP also had good years.
Honestly, thanks to all the support and guidance I get from the board.
To 2015...a new season.
Go Yanks!
c