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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Selling or buying the dip ?!
    "much of my gains would evaporate (at least temporarily) in a SEVERE market crash."
    What a surprise! Who would have guessed?
  • Selling or buying the dip ?!
    - “Assuming your question is in good faith and not a rabbit hole invitation...”
    Why would I waste my time misleading people? My question was intended for MFO board members in total who share an immense amount of combined investment wisdom and experience.
    - “Other posters have presented studies to show it does NOT work. I've argued that such studies produce statistics that support the Three Kinds of Lies.”
    Arguments others may have made to the contrary need not be characterized as lies. It is possible for good and rational people to view the same evidence and arrive at different conclusions.
    - “What categories of stocks were bought?”
    It’s a fair point - but somewhere outside the focus of @Derf’s question which I took to be related more to the broad-based U.S. equity indexes. There are always pockets of value in any market. A separate thread on that question might generate much interest.
    - “What about taxes on the sale of assets used to BTD? Were Dip BUYs ultimately SOLD and gains realized?
    Again - we’re stretching the intent of Derf’s original question. Many here invest in tax-sheltered accounts like 401-Ks and some others, including self, hold substantial amounts in Roth’s which are tax exempt. I’d expect Derf’s question and responses to it to be relevant to those investors as well.
    - “Every Dip I bought (at or near the low point of each Dip
    Therein lies the crux of the issue. What verifiable formula, measurement, or other objective criteria exists to inform an investor when it’s appropriate to buy a dip and when it wouldn’t be?
    - “BTD in bonds for me right now is akin to playing a not-so-friendly game Russian roulette.”
    Fair enough. I like the analogy. But the same might be said of buying the S&P or other broad-basket of equities at elevated prices.
    - “ALL BUYs remain invested in broad basket US stocks.”
    This would seem to contradict point #3.
    - “BUT much of my gains would evaporate (at least temporarily) in a SEVERE market crash.”
    I think that’s what most who have responded to the question are concerned about.
  • Selling or buying the dip ?!
    “If you SOLD the most recent Dip/Diplet, I kindly suggest you address the question, "What do I do now that the market has just about fully recovered?"
    ...To the larger issue, if buying the dip works with stocks all the time, than it should work with other assets. Right?
    Anyone here buying the dip in bonds? How about gold and silver- which have been more depressed than equities this year? The Aussie (Australian Dollar) is reported to be down big time. Anyone buying that dip?
    If dipping just works with a single asset, I’d surely like to learn why that is the case.
    To the larger issue, if buying the dip works with stocks all the time, than it should work with other assets. Right?
    Assuming your question is in good faith and not a rabbit hole invitation...
    Um, no on both counts.
    BTD does NOT work all the time with stocks.
    Other posters have presented studies to show it does NOT work. I've argued that such studies produce statistics that support the Three Kinds of Lies.
    There are significant variables to the equation that will generate vastly different results: What monies were used to BTD? At what point of the Dip did the investor BUY? What categories of stocks were bought? Are the BUYs still fully invested? What about taxes on the sale of assets used to BTD? Were Dip BUYs ultimately SOLD and gains realized? On and on and...
    That said, it's worked SO FAR for me EVERY time I bought a Dip/Diplet since the 2020 crash. Every Dip I bought (at or near the low point of each Dip - yeah, that matters) with cash, CD proceeds and/or bond OEF sales proceeds. I used money from asset classes that were making nothing-to-virtually nothing. Since then they've ALL increased in value significantly (except the current one which is only UP a few %) over what their value would have been had they been left where they were. ALL BUYs remain invested in broad basket US stocks.
    It's all worked swimmingly BUT much of my gains would evaporate (at least temporarily) in a SEVERE market crash.
    BTD may or may NOT work with other assets.
    And IMO, it likely won't for many other asset classes. To wit, bonds are driven by significantly different market forces and are in a different stage of their market cycle. BTD in bonds for me right now is akin to playing a not-so-friendly game Russian roulette.
    Conversely, BTDs of the S&P since March 2020 crash has worked largely due to the depth of the crash and the Fed actions (to be mild) that have supported its recovery and higher prices.
    And...if history rhymes, some of the future US market Dips/Diplets will transcend into full blown corrections or bear markets. We are getting closer to the next of both with each passing trading day. BTD results when the Dip becomes a C or BM (so to speak) may cause some investors to rush off to the toilets.
  • SS increase: what to do
    "In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase."
    That is correct, but remember that the 2021 was supposed to be four times this amount or $15.60 ($3.90 x 4). It was limited to 25% by the law that was passed to help with Covid (can't remember the law's official name).
    ----------------------
    stillers: As my wife likes to say, "Good remembering!" Here's an article about that from 09/21/20:
    https://www.cnbc.com/2020/09/29/congress-may-limit-medicare-part-b-premium-increase-for-2021-.html
    ------------------------
    It is my understanding that this will be deducted this year in addition to the new calculated amount for 2022, so whatever this year's amount calculates out to, this $11.70 ($3.90 x 3) will be added as well. Of course, this assumes that your particular SS benefit increase exceeds this Medicare increase, otherwise you are held harmless.
    ----------------------------
    stillers: Not sure how that's your "understanding " of that. I've never seen that written but I could have missed it. Do you have a reference/link? Having worked in other areas of the Program for a coupla decades, it would knock me off my chair to learn that was correct, or even contemplated as something that could pass, or pass-through, as it were. But I digress.
    All that aside, and cutting to the chase, here's medicareresources.org's take on it as of 10/05/21:
    https://www.medicareresources.org/faqs/how-much-does-medicare-part-b-cost/
    Excerpts:
    Medicare Part B costs: key takeaways
    Standard Part B premiums are $148.50/month in 2021; projected to be $158.50/month in 2022...
    ...As described below, the Social Security cost-of-living adjustment can sometimes limit the increase in Part B premiums, but that’s not expected to be the case for 2022, as the COLA is expected to be historically large.
    The Part B premium increase from 2020 to 2021 was smaller than initially projected, thanks to a short-term government spending bill that was enacted in the fall of 2020, and that included a provision to cap the increase in the Part B premium for 2021.

    That ($158.50-148.50 or) $10 increase is in line with some other estimates I've seen and does not quite compute with what you posted.
    And in relation to the subject of my post, a response to another poster's comment, "Medicare will eat it anyhow," even if correct, the absolute Medicare Pt B increase in 2022 will be small relative to the SS COLA increase for the vast majority of recipients.
    -----------------------------
    Just my two cents worth
    -------------------
    stillers: As we used to say in the bizness, "Noted."
    -------------------
  • Growth Bubble: Making Money on Companies That Make No Money
    Interesting article @LewisBraham.
    Hmm. Does this take into account companies are less capital intensive than they were 20-30 years ago? Many growth companies are in the tech segment...building out their eco system and capturing customers ala Apple back in the day. Who cares if the customer is profitable now, they will be way profitable over the next five years. Many companies are bought for their technology before they become profitable...MuleSoft, by Salesforce, CRM. Look at Avalara, not profitable I believe but growing revenues, taking market share.
    Last I checked non profitable companies don't really pay much tax either...think Bezos and AMZN...churned thru money, not profitable, huge free cash flow to invest back in the business, took market share, scaled business, didn't pay much in taxes...anytime they want they can flip the switch and scale profits
    I'm on the fence on this one, respect the wisdom of GMO etc, but wonder if this thought process requires adjustment to today's world?
    Best,
    Baseball Fan
  • Selling or buying the dip ?!
    Ugh! Nobody's dancing here over our recent Dip/Diplet BUYs as the gains are still negligible and the ST verdict ain't in yet. That said, we have partied pretty hard over the six prior BTDs we've participated in since March 2020, all of which are UP 10%-60%.
    But that's NOT the point.
    The point is ALL investors have a choice with Dips/Diplets, as we have EVERY day of the year with/without them: BUY, SELL or HOLD.
    If you bought this last Dip/Diplet, things are looking good. Stories of the the demise of the BTD strategy seem to have (once again) been greatly exaggerated.
    We'll cross over the 50dma today and sights will be set on the most recent S&P high of 4536, 2.2% higher than THU's close.
    If you SOLD the most recent Dip/Diplet, I kindly suggest you address the question, "What do I do now that the market has just about fully recovered?"
    BTW, that answer should have already been in your investment strategy with specifics on the execution of your strategy at a pre-described time/level. If it wasn't, kindly suggest you put it in there now.
    Not the best, but it's FREE:
    https://www.yahoo.com/finance/news/p-500-price-forecast-p-163010316.html
  • TSHIX
    There are never any early redemption fees on Fidelity funds.
    Fidelity has two different sets of policies. One on non-Fidelity mutual fund transactions and one on Fidelity fund transactions.
    - Make too many (two) short term (within 30 days) round trip (buy, then sell) transactions on a single Fidelity fund in a single account within a 90 day span, and you may begin triggering restrictions on trading Fidelity funds.
    http://personal.fidelity.com/products/trading/Trading_Platforms_Tools/excessive_trading_policies.shtml
    This is Fidelity's excessive trading policy.
    There are so many exceptions that if this is something you really want to do, it shouldn't be a problem. It doesn't apply to MMFs or reinvested divs. It doesn't apply to trades totaling less than $10K per day, as noted above. (The limit had been $1K, but was raised to $10K a year ago.)
    Or you can use the same automatic investment mechanism that people use to buy TF funds for a $5 fee. If you use this to buy a Fidelity fund, then regardless of the amount, the transaction doesn't count as part of a round trip.
    - Sell shares of a non-Fidelity NTF fund within 60 days of purchase and you will incur a short term trading (not early redemption) fee imposed by the brokerage. (The funds themselves may impose an additional early redemption fee; Fidelity funds do not.)
    https://www.fidelity.com/mutual-funds/all-mutual-funds/fees
    Unlike the excessive trading policy, which applies to Fidelity funds and is focused on the number of trades in a fund and not the shares, short term trading fees are focused on which shares you sell quickly.
    Shares are treated FIFO, so this is also a relatively easy fee to avoid. If you purchase 100 shares in May, another 100 in July, and sell 100 in August, you will be fine. Even if you specifically identify the July shares as the ones you're selling.
  • Let the SS COLA Projections for 2022 Begin
    By law, "[t]he standard Part B premiums are set to cover 25% of projected average per capita Part B program costs for the aged, with federal general revenues accounting for the remaining amount."
    https://sgp.fas.org/crs/misc/R40082.pdf
    However, for 2021 the law was changed so that the federal government absorbed most of the premium increase.
    To ... avoid a large premium increase, Congress in the new budget law added enough money to Medicare so, according to a spokesman for House Speaker Nancy Pelosi, the Part B premium will increase only by an estimated $4 a month.
    https://www.aarp.org/politics-society/advocacy/info-2020/congress-medicare-part-b.html
    So part of the increase for 2022 would seem to be catching up to what 2021 should have been. Thus only the remainder of the 2022 increase would be due to the projected rise in medical costs between 2021 and 2022.
    That may not make you feel any better, but it does help to harmonize the 2022 premium increase (whatever that turns out to be) with the small increase in medical costs over the past year.
    While CMS announces original Medicare premiums in November, it has already released average increases for private Medicare insurance:
    The average premium for Medicare Advantage plans will be lower in 2022 at $19 per month, compared to $21.22 in 2021, while projected enrollment continues to increase. As previously announced, the average 2022 premium for Part D coverage will be $33 per month, compared to $31.47 in 2021.
    https://www.cms.gov/newsroom/press-releases/cms-releases-2022-premiums-and-cost-sharing-information-medicare-advantage-and-prescription-drug
  • Selling or buying the dip ?!
    No telling where this all ends up by YE, but for now...
    ...with earnings rolling in, futures are UP nicely this AM, and S&P will likely have its 50dma of 4,364 in its crosshairs today/tomorrow (maybe even at today's OPEN).
    If it overtakes it, its previous high of 4,537 will come into focus and be the next target on the UP side.
    Having done this successfully several times since the 2020 crash, I again BOT this Dip/Diplet. At this stage of the process I wonder if I didn't BUY enough.
    Just curious...If you SOLD the Dip/Diplet, what'd'ya do now?
    FWIW, I've been there a few times years ago using my old strategy that was driven by capital preservation/loss avoidance, and EACH TIME failed to respond quickly enough. And it cost me.
  • SS increase: what to do
    ...Medicare will eat it anyhow.
    There's a lot of that notion going around. Let's walk through that.
    I did this relatively quickly - please check my math. Also see Disclaimer below.
    Looking ahead...
    If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
    No definitive word yet on the Medicare Part B increase for 2022.
    Looking back...
    In 2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
    In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
    So...
    IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
    NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
    Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.
  • Let the SS COLA Projections for 2022 Begin
    ...And yet, I just read that Medicare will eat the increase. Should have remembered.
    There's a lot of that notion going around. Let's walk through that.
    I did this relatively quickly - please check my math. Also see Disclaimer below.
    Looking ahead...
    If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
    No definitive word yet on the Medicare Part B increase for 2022.
    Looking back...
    In 2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
    In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
    So...
    IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
    NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
    Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.
  • TSHIX
    Lost 18.14% in 1Q 2020, vs 10.94% for FMSDX .
    WBALX lost only -8% in 1Q 2020.
    But....FMSDX has a 3 year annual return of close to +17%, versus TSHIX at 12.5% and WBALX at 10.6%.
  • TSHIX
    Lost 18.14% in 1Q 2020, vs 10.94% for FMSDX .
  • BAMBX VS TMSRX
    Had given up on many of the funds listed in this string. But I stayed with HMEZX, despite Nexpoint having a questionable partner history (via Highland Capital - J. Dondero). It is a red flag for many.
    But HMEZX has been a solid "steady eddy" performer. Returns are bond-like, and it has outperformed other merger-arb funds. If not for that 1 red flag, I would own a lot more.
    Another interesting vehicle is HRSTX, which converted a few years back to an options-based fund. Very steady, with great performance during negative market periods since its 2018 conversion.
  • Large Cash vs bonds or dividends?

    Here’s a clip of what Ed said re cash:
    “So, back to asset allocation – obviously have enough cash reserves to fund at least two years of living expenses, in insured certificates of deposit. There is a market to be shopped there in smaller banks and credit unions, with nine to twelve month certificate yields running between 35 and 45 basis points. In terms of currencies, if your liabilities are dollar-denominated, your investments also should be. The exception is using international funds that do not hedge back their foreign currency exposure to dollars. In terms of bonds, favor those with maturities of less than a year, generally using some of the ultra-short bond funds available from Vanguard or Northern Funds.
    @bee Good point on oil. It’s taught me the value of patience and sticking to your guns, as most of us abandoned our oil positions way back and watched its price fall into negative territory (early 2020). Yet - here it is at near $83. I remember T Boon Pickins predicting this price rise a few years ago. T. Boone had it right. Unfortunately he died in 2019.
  • The REIT M&A boom continues with record-breaking year
    Perhaps of interest to those with REIT holdings and to those considering them. Includes a link to the referenced M&A and Strategic Transactions Monitor report.
    A new report from JLL’s Capital Markets M&A and Corporate Advisory details the surge of $108B in REIT M&A transactions and general outlook for the sector.
    REIT M&A boom continues
  • Let the SS COLA Projections for 2022 Begin
    Per Google search...
    COLA 2022 Increase Announcement The Cost of- Living Adjustment (COLA) for 2022’s increase will affect the money disseminated monthly to Social Security beneficiaries. It will most possibly be declared on October 13. Such a schedule is in accordance with the 2020 declaration for the 2021 COLA increase.
  • Let the SS COLA Projections for 2022 Begin
    We should be days away from the 2022 increase announcement.
    Note that the Social Security Benefits Increase in 2021 was announced on the SSA site on October 13, 2020.
    2021 announcement per SSA site:
    https://blog.ssa.gov/social-security-benefits-increase-in-2021/
  • Wealthtrack - Weekly Investment Show
    I like Vanguard Tax-Managed Small Cap (VTMSX) for taxable accounts.
    The fund attempts to tracks the S&P 600 index while minimizing taxable gains.
    VTMSX has performed well vis-a-vis small blend funds since my initial purchase approximately 10 years ago.
  • Taxes That Tax You
    “I like to pay taxes. With them, I buy civilization.”
    ― Oliver Wendell Holmes Jr.
    A broader discussion of regressive and progressive taxes might be useful. Sales taxes on necessary goods--and necessary is a debatable term obviously--are regressive in that poor people spend a greater proportion of their income on essentials--such as food and housing--than the rich. So the sales tax rate on basic necessities has a greater impact on the poor than the rich and is therefore regressive. But what is a basic necessity? I don't think soda is. In fact, it is one of those products that is essentially destroying the health of many Americans and has a hidden cost--or tax you could say--on our healthcare system. I also am not particularly fond of property taxes for one's primary residence, yet believe they are absolutely justified for secondary residences, investment properties and summer homes. The prospect of eviction for someone who has essentially paid off their house seems unjust, and when those property taxes are used to finance schools as is often the case, it leads to an inequitable school system in that high property value areas have more funding than low property value areas. So while not exactly regressive, property taxes and rental taxes certainly seem problematic. By contrast, income taxes, estate taxes, corporate taxes and capital gains taxes make complete sense to me.