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Getting off the sidelines - when?

For those waiting on better valuations to buy Equities, at what point would you be a serious Buyer? Do you have a specific plan in place?

What about Bonds (yeah, what about Bonds) - are any type/class of bonds worth holding in 2022?



Current S&P 500 PE Ratio: 25.85
Mean: 15.96
Median: 14.88

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Comments

  • edited January 19
    JD_co said:

    For those waiting on better valuations to buy Equities, at what point would you be a serious Buyer? Do you have a specific plan in place?

    What about Bonds (yeah, what about Bonds) - are any type/class of bonds worth holding in 2022?



    Current S&P 500 PE Ratio: 25.85
    Mean: 15.96
    Median: 14.88

    If you are on the sidelines congrats. Don’t see much fear in this market just everyone wanting to buy the dips. A lot of complacency. I guess that is what the past twelve years have conditioned investors to do. Should we actually get something more than a garden variety correction ala late 2018 and February/March 2020 would use a Zweig momentum buy signal to get back in. Worked like a charm after those two brief sell offs as well as the longer bear of 2008.

    As for bonds the scary consensus is buy floating rate/bank loan funds as they are the place to be during periods of rising short term rates. Can’t argue with that ( and I have an allocation there) other than it seems a bit too pat and overwhelmingly embraced. If you get a really bad bear market in stocks/junk bonds, the floating rate/bank loan category will not protect you,
  • I've dipped a toe in FFRHX and etf SEIX which was mentioned in the January 2022 commentary. Otherwise, I have the majority in cash, but mostly because I'm the most risk-adverse investor in this forum !
  • CTFAX, Columbia Thermostat Fund, should have adjusted/increased equities as follows:
    image

    Should be up to 25% equities, from 10%.
    Rick
  • Junkster, I always do appreciate your posts. I will have to do some research on Zweig momentum buy signals.

    Carew, I'm in an all too similar boat (majority cash). Each down market day means more small equity purchases, though. Like tiptoeing into a minefield.
  • For the unsophisticated like myself, CTFAX allocation change is as good a signal as any to increase equity allocation.
  • edited January 20
    Step carefully. It’s like walking on pins and needles now. Precious metals appeared to “blast off” today with silver leading the way. Most (p/m) mining companies / ETFs up 7-8% today. But could fall back to earth again.

    First, I’m never on the sidelines. My long time allocation hasn’t changed much. By building a separate 8%+ “Spec” position in recent months I’ve in effect cut back a bit across all 3 normal areas: Alternatives, Growth, Income (- 2-3% out of each). Without being specific, the spec holdings are hedges against a broad equity selloff.

    Personally, I’m more inclined now perhaps to place small opportunistic bets on individual stocks or niche funds on further pullbacks than on the equity market overall. (But I’d never recommend anything.)

    Bonds are “challenged” presently. However, on a really nasty day they’ve held up better than most equities. If the Fed pushes too hard they may induce a recession and cause rates to start falling, especially on the longer end. I don’t mess much with sub-investment grade bonds. Respect @Junkster’s knowledge and experience in that area.
  • edited January 20
    Rickrmf said:

    CTFAX, Columbia Thermostat Fund, should have adjusted/increased equities as follows:
    image

    Should be up to 25% equities, from 10%.
    Rick

    @Rick, I don't follow. Your link takes me to the same allocation table they've had on the site since last May, showing the same 10-90 allocation, and that it would take an S&P 500 below 3600 to get them up to 25% equity.

    Is there a new table somewhere? If there is, I can't find it on their site.
  • Andy, yes, looks like this is the chart from May. If still accurate, it has a way to go before adjusting.
  • Thanks, @Rickrmf. I thought they might have shifted the whole table toward more equity sooner.
  • CTFAX Only down 2.18% YTD Good or bad for a fund with 10% in equities ?
    Enjoying the ride, Derf
  • Hi Derf,
    Out of curiosity, on Stockcharts, I compared CTFAX with my other more defensive holdings: GIBLX (my highest quality bond fund), along with TMSRX, REMIX and SWAN. No real surprises.
    Rick
    https://stockcharts.com/freecharts/perf.php?CTFAX,GIBLX,TMSRX,SWAN,REMIX
  • Try substituting FMSDX for TMSRX and look at the 30-day and 60-day charts.
  • edited January 20
    Added a couple bond funds, PTIAX and MWTRX and index AGG, to Rick's chart for comparison to the alts. CTFAX and TMSRX, 2 alt funds I own, are performing YTD the same as bonds. I guess no surprise.

    I was actually looking at my alts and tracked bond funds this morning to see how they have compared return wise this year. As of this morning YTD, CTFAX was down -1.7%. TMSRX down -1.4%. Bond funds I track but don't own, AGG down -1.6%. PTIAX down -1.2%. MWTRX down -1.5%...

    A few ultra short bond ETFs I do hold in my withdrawal bucket; MINT -0.2%, FLRN 0.0, JPST 0.0, FTSL +0.17. RPHYX, my biggest holding in this bucket, is +0.01%. Seems like these funds are doing fine through this volatile start to the year.

    FWIW.
  • edited January 21
    @MikeM - TMSRX was up .50% yesterday. Somewhere in that concoction there must be some exposure to the precious metals. That would help explain its slump throughout much of 2021 as well as the bump up yesterday when gold and silver were hot. (Miners +7%)
  • I saw that too @hank. Surprised me. You might be right about exposure to PMs, gold and silver maybe. Silver is looking good again today. Be interesting to see if that affects TMSRX again.

    I have no stomach for miners, but I do hold IAU, some SLV and a small amount of copper, CPER.
  • Today's failed rally was encouraging for us "Sideline" folks. Some of the air finally starts to come out of the bubble. Who knows, this could get interesting.
  • Howdy folks,

    @hank you may be correct about the precious metals. I'm copying from Liberty Coin Service's Patrick Heller's FB page with YTD returns.

    Patrick Heller "Current financial markets are getting interesting. Here are how prices have changed from the close on December 31, 2021 through today, January 20, 2022:
    Platinum: +8.9%
    Palladium: +8.5%
    Silver: +5.9%
    Gold: +0.8%
    US Dollar Index: -0.2%
    Dow Jones Industrial Average: -4.5%
    Standard & Poors 500 Index: -5.9%
    Bitcoin: -9.0%
    NASDAQ: -9.5%
    Russell 2000: -10.0%
    As you can see, the prices of platinum, palladium, and silver have outperformed gold thus far in 2022. Gold has outperformed all the other assets listed through the first 20 days of this year.
    By the way, the US Treasury 10 Year Note interest rate has jumped from 1.52% to 1.83%, an increase of 20.4%!"

    and so it goes,

    peace and wear the damn mask,

    rono
  • Relative performance of FDIC cash looking good as well so far this year.

    Astounds me in my humble, no nothing opinion what appears to be why so many are in a hurry to jump back in looking for a bargain....this might have a bigly ways to go on the downside.

    Remember back in 87, Black Monday? Guys who were my age back then in the office saying there goes my retirment...remember March 20'....guys looking shell shocked...remember 01, the jig jag downwards, down several points, up a few, down several...

    Don't we all really know this is an artificial, juiced, BS of a market I mean casino?

    Let it flush, let it flush bigly. Hit the freaking reset button already. Make asset prices reflect reality and let the older folks gain a little interest over infaltion on their money market accounts.

    Enough with this BS already.

    Do what you want, be careful and good luck to ALL,

    Baseball Fan
  • Agreed.
  • edited January 22
    “Relative performance of FDIC cash looking good as well so far this year.”
    You got a point. +0.01% is better than a loss I suppose.

    I’m carrying my normal exposure to metals and miners. It’s tempting to go overweight. But nearly every time I’ve done that in the past I’ve gotten burned.
  • Perhaps a reference to the savings accounts offered at major banks. For example, AMEX offers 0.50% on its account with up to 9 withdrawals per month.
  • msf
    edited January 23
    When I saw "up to 9 withdrawals per month", I was wondering if you read the number upside down:-) As AMEX explains, there used to be a federally mandated limit of six. After that legal restriction was lifted banks were permitted (not required) to allow an arbitrary (or unlimited) number of withdrawals. AMEX chose nine. Its page doesn't say why.

    https://www.americanexpress.com/en-us/banking/online-savings/faq/monthly-withdrawal-limit/

    If you're shopping for a new account also check out Marcus. It too pays 0.50%, it has unlimited withdrawals, and most important, it has a good promotion right now. Register for the promotion, deposit $10K or more, leave that in the bank for 90 days (last year it was 60, they did turn that number upside down), and they'll add $100 to your account.

    https://www.marcus.com/us/en/savings/osa-savingsbonus

    (There's also a referral bonus that a new customer can share with an existing customer. This appears to stack with the $100 promotion: "Referral Bonuses may be combined with other promotional offers available to Marcus customers.")
    https://www.marcus.com/us/en/savings/referral-offer-terms
  • Thanks @msf I'm sure my bank would love to see me send a large sum, (90%) to Marcus !!
  • I have been a Marcus customer since 2017 and would avoid it due to technology and customer service issues.
  • edited January 23
    Ally has terrible customer service but a much better site. Discover Bank has good customer service and a competent site(but slightly lower rates)
  • Do your homework, read the fine print.

    I could be wrong, but I recall a few years ago when inquiring about Discover mmkt, they gate your withdrawls, meaning you could not take out over $100k at a time etc.

    Baseball Fan
  • msf
    edited January 23
    Sources?

    DepositAccounts reports:
    Ally Bank - 769 customer reviews, 3½ stars
    Discover Bank - 231 reviews; 3½ stars
    Marcus - 198 reviews; 2½ stars

    If we're talking about personal experience, I've been a customer since before Goldman Sachs renamed it Marcus Bank (Dec 2017), before Goldman Sachs acquired the former GE Capital Bank (April 2016). I got tired of chasing bank rates and settled on a bank with moderately high rates that didn't bounce all over the place.

    Maybe if you're dealing with the bank for a loan, or need help wiring money, quality service isn't there. I don't know; I just use it to ACH money back and forth. Never had an issue. If you want cash management services (checking, ATM) it's not the bank for you.

    Money starts earning interest the day you initiate an inbound transfer, so I don't care whether that ACH takes one day or three. Unlike some online banks, one can link two ways, so that pulls or pushes work from either side.

    I've used Ally Bank, and I still use it for liquid CDs (Ally gives a 0.05% bonus for CD renewals). Though they were more useful in the past to lock in rates when they were falling. Now with rising rates, not so much. Limited to six withdrawals per period.

    Discover Bank pays the same 0.50% as the other banks, though that's new. Like Ally, still limited to six withdrawals per period.

    That's according to the mouse-over for the "excessive withdrawal fee" on this page. OTOH, one of its FAQ answers reads: " We are currently not enforcing the monthly transaction limit on savings and money market accounts." So the bank doesn't allow you more than six withdrawals but it won't stop you?


  • edited January 23
    Both Discover and Ally currently have no limits on withdrawals from savings accounts (though that might be temporary)
  • I'll mention again T-Mobile money, full 1% paid on all balances. I also have used GS/Marcus for years and just took advantage of the $100 offer, hey why not!
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