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While it's difficult to do so at my age, I'm watching Eric Cinnamond and reading his Absolute Value blog. So I'm taking profits and trying to make myself sell my losers (much more difficult). New money from my 403b sits there glaring at my failure to ride the bubble, and I worry about my "not so old" money, which is generally positive, although some of it took overlong to become so (but my idea of "new" is within the last 5 years). I did buy some XAR, due to some suggestions here. This is an artificial market, driven by QE, and rates have to rise sometime. Yellen will be replaced by a compliant individual, but there is an increase or two in interest rates in the meantime. If anyone knows when to step out of this market, they're much smarter than I. One also has to be able to predict crowd behavior, to get to the exits before they do; and some members of this crowd use megadata and computer arrays far beyond my ability, time or resources. I haven't put my grandchildren's money in since I have to believe there's at least a 10% decline to come, but 20% seems possible. As others have commented, one needs to buy when there is blood in the gutters (but, frankly, I doubt the Rothchilds were ever fully invested). Must admit that I'm a long way from dog food for lunch (and, hey, the French eat horsemeat, so I hear), but I bet some of that Fancy Feast with a bit of onion and hot sauce would be mighty tasty. Unfortunately, it's not actually that cheap.
I don't think you are alone in having a lot of money in cash.
Must admit that I'm a long way from dog food for lunch (and, hey, the French eat horsemeat, so I hear), but I bet some of that Fancy Feast with a bit of onion and hot sauce would be mighty tasty.
Back to multiple paragraphs ago: I don't think DCA into market that is (probably) overvalued is a wise strategy. I read the latest Cinnamond Absolute Investing blog, and I wish I had his millions (so I could feel good about a Starbucks latte, and walking my dog, and not buying any over-valued thing. [He's also a lot younger, so he can get back in the game when values exist.]). And he actually plans to do so. This raises the question: do I save cash; plunge heavily in to any new fund he establishes? I'm pretty sure he will Perhaps the post suggesting that 2 initial up months guarantees a positive year is correct, but I may be up 8% now (in some accounts) and 2% at Xmas, which makes me positive, but not too happy. People who take 1% of my money (or more) are isolated from my needs. If their funds decline 5% in a 20% decline (an extremely rare event), I have still lost money, but they trumpet a successful year. Cinnamond says there's nothing he sees worth buying, and I'm still trying to find stuff to sell. I'm sure there are multiple individual stocks that will do well as (relatively) desperate managers and individuals buy them, but I hope they are paying dividends. While happy with my gains, I have to wonder if this another peak at which I should sell. I've missed or ignored all the other, so why should this be different?
I am fascinated by Eric Cinnamonds blog. I wonder if he has a future as a journalist. He is prolific as well, posting almost daily. I do struggle to come away with actionable advice from him though. I can't sit there in 100% cash. Especially when there are solid companies that could be had at decent values. I think he is looking for deep value and I can live with avoiding over valued stuff.
If you stretch your imagination a bit, you'll perhaps discern how my ramblings below relate to the question of whether to hold cash. ---
Almost everything I own or track is having a great year based on just a couple months. My four conservative allocation/balanced funds (DODBX, OAKBX, PRWCX, RPGAX) are all ahead 4+% - remarkably close to one another considering that those managers normally take different approaches to markets.
Funds with exposure to gold and other metals are a bit ahead of the pack. Yet, somewhat ironically, refiner-rich PRNEX (which I sold in December) is up exactly0% YTD. How'd they manage to do that?
Bonds and income-focused funds lag. Price's Equity &Income (PRFDX), once a great fund, is up around 3.4%. Real Estate funds are flat to slightly up. The bump in rates is taking its toll.
We're 8 weeks into the year. A 4% YTD pace for some of these conservative and balanced funds, if sustained, would lead to a roughly 25-26% year. Normally, when something seems too good to be true, it is.
I am fascinated by Eric Cinnamonds blog. I wonder if he has a future as a journalist. He is prolific as well, posting almost daily. I do struggle to come away with actionable advice from him though. I can't sit there in 100% cash. Especially when there are solid companies that could be had at decent values. I think he is looking for deep value and I can live with avoiding over valued stuff.
I agree. Whenever I see an adviser that writes a lot I question its value. They say so much you really can't figure out what they are saying.
Comments
Great tool that is often mentioned by @MJG, @davidrmoran and others.
https://portfoliovisualizer.com/backtest-portfolio
Let me know if I can help you navigate the site.
Of course, having no negative rolling 3 year returns is a far more stringent test than requiring to be whole again in 3 years.
You also could do 50-50 DSENX and PONDX to create your own conservative balanced fund. Can't back-test more than 3+y though.
From The Prince of Tides / Time: 2:23
Perhaps the post suggesting that 2 initial up months guarantees a positive year is correct, but I may be up 8% now (in some accounts) and 2% at Xmas, which makes me positive, but not too happy.
People who take 1% of my money (or more) are isolated from my needs. If their funds decline 5% in a 20% decline (an extremely rare event), I have still lost money, but they trumpet a successful year.
Cinnamond says there's nothing he sees worth buying, and I'm still trying to find stuff to sell.
I'm sure there are multiple individual stocks that will do well as (relatively) desperate managers and individuals buy them, but I hope they are paying dividends.
While happy with my gains, I have to wonder if this another peak at which I should sell. I've missed or ignored all the other, so why should this be different?
---
Almost everything I own or track is having a great year based on just a couple months. My four conservative allocation/balanced funds (DODBX, OAKBX, PRWCX, RPGAX) are all ahead 4+% - remarkably close to one another considering that those managers normally take different approaches to markets.
Funds with exposure to gold and other metals are a bit ahead of the pack. Yet, somewhat ironically, refiner-rich PRNEX (which I sold in December) is up exactly 0% YTD. How'd they manage to do that?
Bonds and income-focused funds lag. Price's Equity &Income (PRFDX), once a great fund, is up around 3.4%. Real Estate funds are flat to slightly up. The bump in rates is taking its toll.
We're 8 weeks into the year. A 4% YTD pace for some of these conservative and balanced funds, if sustained, would lead to a roughly 25-26% year. Normally, when something seems too good to be true, it is.