Took a Tad Off the Table

[john94549]

OK, OK, I know market-timing is a "no-no". But with my trading account up smartly (circa 5.5%) since the first of the year, I did take a bit off when the S+P once again hit 1330. Not a big thing, just went from 90/10 to 65/35 in my trading account. I was wondering if any Bogleheads who have a bit in trading accounts (I have about 5% of investable assets in same) think it's time to "book some green" as it were.

I did the same thing last year, booked green when the S+P was up smartly by mid-February, and wound up quite a bit ahead, but I had other investment vehicles for the loose cash.

This year, I'm probably relegated to swing trading.

Oh, well. Perhaps we can hope for some of those Dow + 600 - 600 + 600 - 600 weeks. Now, those were money-makers.

[yobria]

When I feel the urge to gamble, I just head to Vegas. Cocktail waitresses and free drinks! I keep my investing life boring. Higher returns that way.

Nick

[dbr]

I have no respect for a trader who isn't willing to stay in the game

[tyrion]

I sold some (8%) of the REIT fund in my Roth and bought the short term bond fund. It wasn't really time to rebalance, but I brought REITs back to their normal target percentage.

I'll probably be called a 'market timer' and told that I should only rebalance when my IPS says to. Whatever. It's my money. And now I can convert the ST bond fund to admiral shares.

[bottlecap]

Congratulations. No, I don't trade unless to rebalance. Not only do I understand the odds are against me, I'd feel like failed in developing my AA if I didn't stick to my AA. Moreover, if my move lost me money, I'd kick myself for being a putz.

Now, would I "take money out" if the market tripled and I was so close the my retirement number that I didn't need to take the additional risk? Heck yeah. But I'd be changing my AA based on my need to take risk (or lack thereof) and not because I was trying to beat the market.

JT

[dbr]

I note that the OP said trading account, aka play money. If that is wrong, then I misunderstood. I stick with the advice that trading means trading and not chickening out.

[empb]

Aren't we all up 5.5% this year?

EDIT: According to Wikinvest, that I've just given a very cursory glance, I'm up 8.7% (1 year dollar-weighted returns still negative however) and the S&P 500 is up 5.3% (although I have a 10% splash of short-term treasuries)... Meh.

[Noobvestor]

Even my safety bonds are up a few percent ... my stock funds, as much as 13% ... so uh, I dunno what I'd take off the table exactly, or where I'd put it.

[Liquid]

Aren't we all up 5.5% this year?

:lol:

[Call_Me_Op]

That's what an investment policy statement (IPS) is for. The IPS will tell you when it is the right time to take something "off the table", so you do not have to guess.

[Aptenodytes]

The whole point of play money is to play. My advice is do whatever strikes your fancy at the moment. If you try to create an optimization strategy for it then it no longer becomes play money.

[Atilla]

My crystal ball says the overall trend in equities will be up from now until the end of June or the end of September.

I'm not doing anything about it, but that's my prediction.

[caaaad]

Trying to get to 10 % and i'm thinking that's hard to do when i'm off the table. Took me 10 years to learn that as i tend to be a fearful greedy investor. Had to learn to reframe my thinking and I get no support here for fearful greedy thinking. Forever grateful as I don't know what i'm up and could care less.

[gkaplan]

How's that decision working for you today?

[john94549]

How's that decision working for you today?

Fine. Actually, I sold a bit more today. I'm a bit of a contrarian, as you might have guessed.

Oh, in response to another query, yes, this trading account is, in fact, my "fun money." About 5% of investable assets.

I guess if Mr. Market just keeps going up, I'll have left some on the table. Somehow, I think that's unlikely.

[DiscoBunny1979]

Why are you arguing with Mr. Market? If the overall market is going up, isn't the idea to make money and stay in the game? I would consider selling loosers, those stocks that are lagging behind AND I would consider selling positions in stocks in which there's a good gain over the past month or two. For instance, I follow IBD's rules that suggest there's really no excuse to let a 20% gain drop to 10% then 0% and then a loss. Take a profit when you have it. But there seem to be plenty of stocks out there to reinvest your money back into. Buy high, sell higher.

[john94549]

My final "sell" is at the close today. I re-balance in February. Turns out I sold at S+P 1330, S+P 1344, and S+P 1360 (or thereabouts; where it closes today is anybody's guess). I will admit that I left a bit on the table as to my prior transactions, but such is life. I never complain when I sell too early. Green is green. Well, we closed a bit lower than 1360 (edit). But a bit higher than 1330.

I was somewhat taken aback by the amount I had to move from equities to FI, given last year's returns. Chalk it up to aging, dividends, and the January-February run-up, I guess. As of market close today, I will be 35/65. Yes, Virginia, I was born in 1947.

You folks have fun. As the cubbies say, wait 'til next year.

[letsgobobby]

too bad for you. Your trading account will miss the run up to S&P500 1635, which is what I predicted at the beginning of the year in the Bogleheads 2012 contest.

Now just so you know, you are allowed to come back and tell us on December 31 that in fact you got back in *just* in time and so captured all the gains, but only if you actually post that prescient move in real-time.

[john94549]

too bad for you. Your trading account will miss the run up to S&P500 1635, which is what I predicted at the beginning of the year in the Bogleheads 2012 contest.

Now just so you know, you are allowed to come back and tell us on December 31 that in fact you got back in *just* in time and so captured all the gains, but only if you actually post that prescient move in real-time.

Ain't gonna do it. Repeat: ain't gonna do it. I re-balance once a year (in February). Stuff goes up, stuff goes down. The only thing that never ceases to amaze me is that I keep getting older. So my "age-in-bonds" does change.

Whacked off $42K of my trading (fun money) portfolio just to re-balance. Now, that hurt. Also had to whack off $29K from my Vanguard stuff. That hurt as well. Cash is cash, at this point. Firewalls and all that.

[Jfet]

what are you going to do with the cash? with short term rates near nil until 2014, I am guessing the Fed would like you back in the market and is pushing with his gentle semi truck to get you there.

[john94549]

what are you going to do with the cash? with short term rates near nil until 2014, I am guessing the Fed would like you back in the market and is pushing with his gentle semi truck to get you there.

Last time I said you were a troll I got admonished. Ergo, you are now a major iggy.

[Jfet]

what are you going to do with the cash? with short term rates near nil until 2014, I am guessing the Fed would like you back in the market and is pushing with his gentle semi truck to get you there.

Last time I said you were a troll I got admonished. Ergo, you are now a major iggy.

Oh ok...so I am a troll but you, who post that you "took some off the table" and are up 5.5% in your trading account are not?

Ok fine...I will find a place to host a screenshot of my trading account. Untrusting Boglehead site doesn't allow attachments...

[letsgobobby]

too bad for you. Your trading account will miss the run up to S&P500 1635, which is what I predicted at the beginning of the year in the Bogleheads 2012 contest.

Now just so you know, you are allowed to come back and tell us on December 31 that in fact you got back in *just* in time and so captured all the gains, but only if you actually post that prescient move in real-time.

Ain't gonna do it. Repeat: ain't gonna do it. I re-balance once a year (in February). Stuff goes up, stuff goes down. The only thing that never ceases to amaze me is that I keep getting older. So my "age-in-bonds" does change.

Whacked off $42K of my trading (fun money) portfolio just to re-balance. Now, that hurt. Also had to whack off $29K from my Vanguard stuff. That hurt as well. Cash is cash, at this point. Firewalls and all that.

I'm just trying to figure out how this is a winning strategy, to miss 2/3 of the run up in stocks so far this year. It is one thing if you don't need to take risk, but another if you are just frankly timing the markets (and thus far, not very well I might add ).

[BYUvol]

I'm just trying to figure out how this is a winning strategy, to miss 2/3 of the run up in stocks so far this year. It is one thing if you don't need to take risk, but another if you are just frankly timing the markets (and thus far, not very well I might add ).

This is his play money, let him have some fun with it. It's not like he is buying a $5k watch.

[minesweep]

This is his play money, let him have some fun with it. It's not like he is buying a $5k watch.

The watch is more accurate than market timing.

Mike