Actionable advice in a Brexit scenario

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Investment101
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Re: Actionable advice in a Brexit scenario

Post by Investment101 » Tue Jun 21, 2016 4:51 am

I got about 50% vanguard total international and 50% total stock, I guess for total stock I don't need to worry about it much since it's US. how about for total international? just leave it?

if they do exit, I am thinking just leave it since I am going for long term, like 10,15 years. Is that the right mindset or should I thinking about selling it.

Actually I got those for about 10 years and I never touched them, should I have sell them or it doesn't matter since I am going for long term?

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Taylor Larimore
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Re: Actionable advice in a Brexit scenario

Post by Taylor Larimore » Tue Jun 21, 2016 1:14 pm

Bogleheads:

According to the International Monetary Fund, in 1915 the World Gross Domestic Product totaled approximately $18 trillion dollars. The United Kingdom had a Gross Domestic Product of approximately $3 trillion dollars.

Whatever the "Brixit scenario," I doubt it will matter very much. The media is constantly looking for something to write about. Brixit is made to order.

When experts disagree, it is often because it makes no foreseeable difference.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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packet
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Re: Actionable advice in a Brexit scenario

Post by packet » Thu Jun 23, 2016 10:10 am

The day has arrived ... and I have done and will continue to do nothing different than the day before.

Actually, things look pretty good thus far... :)

:beerCheers,
packet
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triceratop
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Re: Actionable advice in a Brexit scenario

Post by triceratop » Thu Jun 23, 2016 10:37 am

packet wrote:The day has arrived ... and I have done and will continue to do nothing different than the day before.

Actually, things look pretty good thus far... :)

:beerCheers,
packet


+1.

Though I am salivating at a buying opportunity for international stocks, if Brexit does occur. The volatility and (hopefully) panic will be useful for long-term investors, i.e. Bogleheads.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Actionable advice in a Brexit scenario

Post by Doc » Thu Jun 23, 2016 4:50 pm

packet wrote:The day has arrived ... and I have done and will continue to do nothing different than the day before.

Actually, things look pretty good thus far... :)

:beerCheers,
packet

Mrs. Doc "invested" in Euros and Pounds yesterday. Total investment approx $450 US. :D

(If she was going to buy today I would have told her to wait.)
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Re: Actionable advice in a Brexit scenario

Post by drg02b » Thu Jun 23, 2016 5:46 pm

Put all your money in cotton. Britain will have to resort to its old-world cotton business, and there's money to be made.

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Re: Actionable advice in a Brexit scenario

Post by packet » Thu Jun 23, 2016 6:11 pm

^^ tulips anyone?

:beerCheers,
packet
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Re: Actionable advice in a Brexit scenario

Post by sco » Thu Jun 23, 2016 7:29 pm

If my AA moves by 5% off target, I'll rebalance... Regardless of the headline. If it happens tomorrow it will likely be from domestic to international equities.

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Re: Actionable advice in a Brexit scenario

Post by CedarWaxWing » Thu Jun 23, 2016 8:12 pm

Turn off the talking heads' reports

stick with the fundamentals of low cost indexing,

know your risk tolerance,

and do not kiss your asset allocation goodbye. :)

m

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Re: Actionable advice in a Brexit scenario

Post by Sidney » Thu Jun 23, 2016 8:23 pm

Doc wrote:
packet wrote:The day has arrived ... and I have done and will continue to do nothing different than the day before.

Actually, things look pretty good thus far... :)

:beerCheers,
packet

Mrs. Doc "invested" in Euros and Pounds yesterday. Total investment approx $450 US. :D

(If she was going to buy today I would have told her to wait.)

@ ~ 9PM EDT -- betting markets have flipped to leave. Pound getting crushed as are futures.
I always wanted to be a procrastinator.

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Re: Actionable advice in a Brexit scenario

Post by lgs88 » Thu Jun 23, 2016 8:32 pm

How does the efficient-market hypothesis account for these wild swings in international stocks on the basis of an odd poll here or there?!

I am scheduled to rebalance into international on the first of the month. Maybe it'll be on sale.
merely an interested amateur

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Re: Actionable advice in a Brexit scenario

Post by triceratop » Thu Jun 23, 2016 8:36 pm

lgs88 wrote:How does the efficient-market hypothesis account for these wild swings in international stocks on the basis of an odd poll here or there?!

I am scheduled to rebalance into international on the first of the month. Maybe it'll be on sale.


Er, aren't the wild swings the expected result of the EMH being true (not commenting either way on its validity) ? New information is being processed by market participants.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Actionable advice in a Brexit scenario

Post by nobsinvestor » Thu Jun 23, 2016 8:48 pm

lgs88 wrote:How does the efficient-market hypothesis account for these wild swings in international stocks on the basis of an odd poll here or there?!

I am scheduled to rebalance into international on the first of the month. Maybe it'll be on sale.


EMH says nothing about the short run [hours, like now]...EMH holds up quite well over the long run as information is processed

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Re: Actionable advice in a Brexit scenario

Post by avalpert » Thu Jun 23, 2016 9:22 pm

lgs88 wrote:How does the efficient-market hypothesis account for these wild swings in international stocks on the basis of an odd poll here or there?!

That is exactly what you would expect under EMH with new information introduced to a volatile and marginal future event. Nobody expects the market to predict the future, it expects it to represent the best prediction given known information - as known information changes the prediction changes.

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Re: Actionable advice in a Brexit scenario

Post by JonnyDVM » Thu Jun 23, 2016 9:45 pm

Looks like great actionable advice would be to short the pound. I'll go back and edit my original answer.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

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baw703916
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Re: Actionable advice in a Brexit scenario

Post by baw703916 » Thu Jun 23, 2016 10:06 pm

My advice to any interested Bogleheads would be to not look at your account balance tomorrow, It won't be pretty, unless you have mostly Treasuries.

I guess that would qualify as "inactionable" advice. :)
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Re: Actionable advice in a Brexit scenario

Post by Rick Ferri » Thu Jun 23, 2016 10:08 pm

Actionable advice is to visit England this summer because everything just went on sale.

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JonnyDVM
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Re: Actionable advice in a Brexit scenario

Post by JonnyDVM » Thu Jun 23, 2016 10:15 pm

baw703916 wrote:My advice to any interested Bogleheads would be to not look at your account balance tomorrow, It won't be pretty, unless you have mostly Treasuries.

I guess that would qualify as "inactionable" advice. :)


Limey jerks. First Bunker Hill and now this. Thanks for nothing.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

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Re: Actionable advice in a Brexit scenario

Post by whodidntante » Thu Jun 23, 2016 10:20 pm

Looks like I will do a little shopping tomorrow.

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Re: Actionable advice in a Brexit scenario

Post by triceratop » Thu Jun 23, 2016 10:21 pm

JonnyDVM wrote:
baw703916 wrote:My advice to any interested Bogleheads would be to not look at your account balance tomorrow, It won't be pretty, unless you have mostly Treasuries.

I guess that would qualify as "inactionable" advice. :)


Limey jerks. First Bunker Hill and now this. Thanks for nothing.


Careful, 250 year old political disputes are still politics! :beer
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Actionable advice in a Brexit scenario

Post by JonnyDVM » Thu Jun 23, 2016 10:22 pm

triceratop wrote:
JonnyDVM wrote:
baw703916 wrote:My advice to any interested Bogleheads would be to not look at your account balance tomorrow, It won't be pretty, unless you have mostly Treasuries.

I guess that would qualify as "inactionable" advice. :)


Limey jerks. First Bunker Hill and now this. Thanks for nothing.


Careful, politics! :beer


Too soon?
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

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Re: Actionable advice in a Brexit scenario

Post by lgs88 » Thu Jun 23, 2016 10:25 pm

Surely it's actionable to discuss means of avoiding the cruel impositions of the Stamp Act of 1765?!
merely an interested amateur

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Re: Actionable advice in a Brexit scenario

Post by scone » Thu Jun 23, 2016 10:26 pm

If the pile on into Treasuries lasts, mortgage rates could drop. So plan on buying property after you get back from England. :)
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Re: Actionable advice in a Brexit scenario

Post by Tanelorn » Thu Jun 23, 2016 10:32 pm

Tanelorn wrote:If you think they will exit, here are two actionable things:

1. Short the pound. The GBP exchange rate, vs dollars or euros, has moved down when exit polls have risen and up when the polls suggested staying.

2. Sell some equities, especially European equities, and hold more cash. If the exit vote succeeds, those equity markets will fall due to rising uncertainty. Then if you're an optimist that it will all work out, buy some cheap shares and get paid to wait for the uncertainty to pass.

It is looking somewhat more likely than not that the exit vote will pass. The immigration crisis may well tear the EU apart.

Pound is -9% right now, FTSE futures are -8%, S&P futures -5% from their peak near today's close. Leave is leading by half a million votes (2% or so of the total counted), with half the votes counted. It's not over yet.

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Re: Actionable advice in a Brexit scenario

Post by sfnerd » Thu Jun 23, 2016 10:39 pm

Rick Ferri wrote:Actionable advice is to visit England this summer because everything just went on sale.


I'm really happy I used miles to get a couple business class tickets to London in September. Now I just have to spend enough on food and souvenirs to make up for the 6 figure hit my portfolio is going to take tomorrow. Ouch!

:sharebeer

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Re: Actionable advice in a Brexit scenario

Post by corpgator » Thu Jun 23, 2016 10:53 pm

I bought some tickets for a 2 weeks vacation to Europe in March next year with points. Should I buy some Euros now?

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Re: Actionable advice in a Brexit scenario

Post by dmcmahon » Thu Jun 23, 2016 10:57 pm

Taylor Larimore wrote:According to the International Monetary Fund, in 1915 the World Gross Domestic Product totaled approximately $18 trillion dollars. The United Kingdom had a Gross Domestic Product of approximately $3 trillion dollars.


I think you meant 2015, and the $18 trillion is the US GDP - world GDP is around $78 trillion.

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Re: Actionable advice in a Brexit scenario

Post by Fudgie » Thu Jun 23, 2016 11:05 pm

:oops:
Last edited by Fudgie on Fri Dec 08, 2017 7:44 am, edited 1 time in total.
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Re: Actionable advice in a Brexit scenario

Post by jjface » Thu Jun 23, 2016 11:06 pm

corpgator wrote:I bought some tickets for a 2 weeks vacation to Europe in March next year with points. Should I buy some Euros now?


Europe might not be there in March :D

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Re: Actionable advice in a Brexit scenario

Post by triceratop » Thu Jun 23, 2016 11:07 pm

Fudgie wrote:
triceratop wrote:
packet wrote:The day has arrived ... and I have done and will continue to do nothing different than the day before.

Actually, things look pretty good thus far... :)

:beerCheers,
packet


+1.

Though I am salivating at a buying opportunity for international stocks, if Brexit does occur. The volatility and (hopefully) panic will be useful for long-term investors, i.e. Bogleheads.


Already placed an order for tomorrow! :mrgreen:


I am kicking myself for buying VSS at 93.12 last week. It seemed like a good idea at the time. :oops:

Oh well, I can buy more next friday (paycheck)! Happy buying. :beer
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Actionable advice in a Brexit scenario

Post by inbox788 » Thu Jun 23, 2016 11:09 pm

Immediate risks, like the potential fallout from Britain's June 23 vote on whether to leave the European Union, could darken the U.S. economic outlook, she told the Senate Banking Committee, as could a downturn in productivity growth that may prove a permanent drag on the economy.

http://www.reuters.com/article/us-usa-f ... SKCN0Z71TA

Rate hike off the table for a while?

buy TLT?

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Re: Actionable advice in a Brexit scenario

Post by lgs88 » Thu Jun 23, 2016 11:10 pm

How come yen is surging against USD? I thought the dollar was the proper "flight to safety" currency.
merely an interested amateur

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Re: Actionable advice in a Brexit scenario

Post by sk.dolcevita » Thu Jun 23, 2016 11:10 pm

Next, Scotland holds another referendum to cede from UK.

Trouble in Spain. Perhaps France as well. Enough to keep negative headlines re: EU flowing.

Europe/International stocks get smoked for near future.

And time to refinance again!

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Re: Actionable advice in a Brexit scenario

Post by Nicolas » Thu Jun 23, 2016 11:14 pm

sk.dolcevita wrote:Next, Scotland holds another referendum to cede from UK.

Trouble in Spain. Perhaps France as well. Enough to keep negative headlines re: EU flowing.

Europe/International stocks get smoked for near future.

And time to refinance again!


Bloomberg just said Wales may leave the UK as well. Doubtful but who knows? Maybe Cornwall too?

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Re: Actionable advice in a Brexit scenario

Post by sk.dolcevita » Thu Jun 23, 2016 11:18 pm

Nicolas wrote:
sk.dolcevita wrote:Next, Scotland holds another referendum to cede from UK.

Trouble in Spain. Perhaps France as well. Enough to keep negative headlines re: EU flowing.

Europe/International stocks get smoked for near future.

And time to refinance again!


Bloomberg just said Wales may leave the UK as well.


I am bit surprised that Wales voted to leave. Perhaps someone from UK can illuminate.

Gold is up 7%!

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Re: Actionable advice in a Brexit scenario

Post by siamond » Thu Jun 23, 2016 11:21 pm

The major media outlets confirmed the 'Leave' victory a few minutes ago. Mind boggling. :(

Yup, sit tight, tomorrow isn't going to be fun for stock markets. Staying the course is the only reasonable course of action, though. As usual.

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Re: Actionable advice in a Brexit scenario

Post by inbox788 » Thu Jun 23, 2016 11:22 pm

Tanelorn wrote:Pound is -9% right now, FTSE futures are -8%, S&P futures -5% from their peak near today's close. Leave is leading by half a million votes (2% or so of the total counted), with half the votes counted. It's not over yet.


So, time to buy? VTI or VXUS (US market vs international market)? I just picked up some VXUS last week, time to average down or retreat to US equities? My IPS let's me do whatever on this small amount I'm investing and type of news.
Last edited by inbox788 on Thu Jun 23, 2016 11:26 pm, edited 2 times in total.

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Re: Actionable advice in a Brexit scenario

Post by Whakamole » Thu Jun 23, 2016 11:24 pm

Is there a reason not to buy?

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Re: Actionable advice in a Brexit scenario

Post by Tanelorn » Thu Jun 23, 2016 11:32 pm

inbox788 wrote:
Tanelorn wrote:Pound is -9% right now, FTSE futures are -8%, S&P futures -5% from their peak near today's close. Leave is leading by half a million votes (2% or so of the total counted), with half the votes counted. It's not over yet.


So, time to buy? VTI or VXUS (US market vs international market)? I just picked up some VXUS last week, time to average down or retreat to US equities? My IPS let's me do whatever on this small amount I'm investing and type of news.

Market timing is hard. If I was buying, I would buy UK equities once I thought the panic was abating. I would not be in a big rush to buy. For all you know, the exchanges may have problems tomorrow early on.

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Re: Actionable advice in a Brexit scenario

Post by LAlearning » Thu Jun 23, 2016 11:33 pm

And they are out!
I know nothing!

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Re: Actionable advice in a Brexit scenario

Post by inbox788 » Thu Jun 23, 2016 11:46 pm

Tanelorn wrote:Market timing is hard. If I was buying, I would buy UK equities once I thought the panic was abating. I would not be in a big rush to buy. For all you know, the exchanges may have problems tomorrow early on.

Yeah, but my IPS doesn't allow me to buy UK equities, so the best I can do is international index. A 5% discount on US equities isn't bad either. And I'm stuck with closing prices on my mutual fund.

It's a shocker, but I think calmer heads will prevail and the crash in the early day will stabilize by the end of the day drifting above lows. Still, I don't expect there is another shoe falling next week and we won't see tomorrows lows again next week. Others would advise you to avoid the falling knives, but I seldom pay attention to these expressions.

Maybe I'll split the difference and buy one tomorrow and the other shortly in a week or two. This bump in the road isn't going to alter any plans in any significant way.

LAlearning wrote:And they are out!

Can Scotland stay or join the EU alone?
http://www.vox.com/2016/6/23/12021222/b ... ppens-next

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Re: Actionable advice in a Brexit scenario

Post by saltycaper » Thu Jun 23, 2016 11:56 pm

lgs88 wrote:How come yen is surging against USD? I thought the dollar was the proper "flight to safety" currency.


Reserve currency for many Asian countries, frequent healthy trade surplus, most govt debt owned by its citizens... ?

Swiss Franc also frequently a safe haven.
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

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Re: Actionable advice in a Brexit scenario

Post by peterinjapan » Fri Jun 24, 2016 12:02 am

I run an export business from Japan. NOT happy about this now.

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Re: Actionable advice in a Brexit scenario

Post by saltycaper » Fri Jun 24, 2016 12:03 am

triceratop wrote:
I am kicking myself for buying VSS at 93.12 last week. It seemed like a good idea at the time. :oops:

Oh well, I can buy more next friday (paycheck)! Happy buying. :beer


Interesting to watch this fund with its heavy Japanese holdings. Some of the biggest decreases in the Neikki are because of increases in the Yen, hurting exporters. But the effect is dampened for unhedged funds like VSS in such situations. So tomorrow might be really bad instead of awful. :D
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

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Re: Actionable advice in a Brexit scenario

Post by triceratop » Fri Jun 24, 2016 12:05 am

saltycaper wrote:
triceratop wrote:
I am kicking myself for buying VSS at 93.12 last week. It seemed like a good idea at the time. :oops:

Oh well, I can buy more next friday (paycheck)! Happy buying. :beer


Interesting to watch this fund with its heavy Japanese holdings. Some of the biggest decreases in the Neikki are because of increases in the Yen, hurting exporters. But the effect is dampened for unhedged funds like VSS in such situations. So tomorrow might be really bad instead of awful. :D


Not to worry, I only have 5% of my portfolio in VSS for now (slowly buying to meet targets). VXUS, however, is at 29% of total portfolio. :shock: Tomorrow is likely to be a awful day.

I think it will be less than 29% come tomorrow's close. :)
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Re: Actionable advice in a Brexit scenario

Post by saltycaper » Fri Jun 24, 2016 12:07 am

Whakamole wrote:Is there a reason not to buy?


Fallout may occur over years, not days. I will buy anyway.
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Re: Actionable advice in a Brexit scenario

Post by protagonist » Fri Jun 24, 2016 12:18 am

Whakamole wrote:Is there a reason not to buy?


Not specifically, but there is no reason to buy either. If the market drops 3%, or 5%, or even 10% tomorrow, it could be an "over-reaction" and might bounce back soon, or it could continue to fall indefinitely, who knows? Do you know what an over-reaction is when it is happening? Brexit is big. The US market fell over 50% in 2008-9.....a 3% or 10% drop is a drop in the bucket. There are many reasons to suspect this could trigger a chain reaction in Europe.

When the NASDAQ fell from its peak (in 2000?) of around 5000 to around 3500 I took that as a buy signal. It is still below its high, 16 years later, not even factoring inflation.

I have no idea if it is a time to buy or sell, so I intend to do nothing. If you buy and profit from it, it was just a lucky guess. Of course, I hope you are lucky.

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Re: Actionable advice in a Brexit scenario

Post by bb10 » Fri Jun 24, 2016 1:10 am

When there's high market volatility, how does one buy mutual funds while maintaining their asset allocation?

I ask because I had planned to invest a lump sum worth about 5% of my total assets tomorrow, 6/24, according to my asset allocation of 60% VTSAX, 30% VTIAX, and 10% in a bond fund. This date just happens to be the day after Brexit.

Is there a way I can make sure tomorrow's investment executes in a way that helps maintain my AA? Since mutual fund balances don't update in real-time on Vanguard's website, I'm not sure how to determine the amount of shares to buy tomorrow afternoon. I imagine my VTIAX balance will not look the same at the end of the day tomorrow as it does right now.

I realize I could hold off and buy after I learn my new end-of-day balances tomorrow, but that feels a little "market-timingy" since I'd planned to do this trading anyway. Thanks for any advice!

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Re: Actionable advice in a Brexit scenario

Post by Whakamole » Fri Jun 24, 2016 1:23 am

bb10 wrote:When there's high market volatility, how does one buy mutual funds while maintaining their asset allocation?

I ask because I had planned to invest a lump sum worth about 5% of my total assets tomorrow, 6/24, according to my asset allocation of 60% VTSAX, 30% VTIAX, and 10% in a bond fund. This date just happens to be the day after Brexit.

Is there a way I can make sure tomorrow's investment executes in a way that helps maintain my AA? Since mutual fund balances don't update in real-time on Vanguard's website, I'm not sure how to determine the amount of shares to buy tomorrow afternoon. I imagine my VTIAX balance will not look the same at the end of the day tomorrow as it does right now.


With Vanguard's UI, you don't specify how many shares when purchasing, you specify how many dollars. So if you were investing $100K, then you'd put in an order for $60K of VTSAX, 30% VTIAX, 10% bond fund of your choice, and how many shares would be determined by the closing price.

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Re: Actionable advice in a Brexit scenario

Post by bb10 » Fri Jun 24, 2016 1:46 am

Whakamole wrote:
bb10 wrote:When there's high market volatility, how does one buy mutual funds while maintaining their asset allocation?

I ask because I had planned to invest a lump sum worth about 5% of my total assets tomorrow, 6/24, according to my asset allocation of 60% VTSAX, 30% VTIAX, and 10% in a bond fund. This date just happens to be the day after Brexit.

Is there a way I can make sure tomorrow's investment executes in a way that helps maintain my AA? Since mutual fund balances don't update in real-time on Vanguard's website, I'm not sure how to determine the amount of shares to buy tomorrow afternoon. I imagine my VTIAX balance will not look the same at the end of the day tomorrow as it does right now.


With Vanguard's UI, you don't specify how many shares when purchasing, you specify how many dollars. So if you were investing $100K, then you'd put in an order for $60K of VTSAX, 30% VTIAX, 10% bond fund of your choice, and how many shares would be determined by the closing price.


True, thanks. But I'm not sure that detail solves the "maintaining my AA" part of the problem...

I'm trying to figure out if there's a way to know each fund's value in the middle of the day tomorrow so I know how much of each to buy at the end of the day to maintain my AA. This may not be possible, but it'd come in handy on a day like tomorrow.

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