Slipping last few days- time to buy now or wait until after 11/8?
Slipping last few days- time to buy now or wait until after 11/8?
I mostly invest in Vanguard mutual Funds (total stock index is my main one) and have some funds available to add to the portfolio. I noticed that in the last few days, its been down every day and am thinking of making the buy today. However, with election day coming up - would it be wise for me to wait until after the election results? Is it likely to go up or down at that point?
- cheese_breath
- Posts: 11764
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Re: Slipping last few days- time to buy now or wait until after 11/8?
Yes it's likely to up or down. Which way nobody knows although you can get a lot of contradicting opinions from the talking heads on television.mj11711 wrote:... Is it likely to go up or down at that point?
The surest way to know the future is when it becomes the past.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Haha, I figured I'd get this answer. I thought maybe there are some older folks on here that have noticed a trend around election time over the years ..
Otherwise, I am probably going to buy now since its down anyway.
Otherwise, I am probably going to buy now since its down anyway.
- cheese_breath
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- Joined: Wed Sep 14, 2011 7:08 pm
Re: Slipping last few days- time to buy now or wait until after 11/8?
If you're investing for the long term a few points up or down now should be insignificant 20-30 years from now.
The surest way to know the future is when it becomes the past.
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Re: Slipping last few days- time to buy now or wait until after 11/8?
yes you can do this!
Re: Slipping last few days- time to buy now or wait until after 11/8?
Buy some now and buy some later. Then you can say you bought some at the right time no matter what.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Granted, in the long run it may not matter - politics probably have less of an impact on the stock market than people think.
Since I am very risk-averse, I would wait a few days or at least just DCA. The market does tend to get choppy before a presidential election. I doubt the market will rally no matter the result but it could crash temporarily, especially if the result is close, the aftermath of which would probably make 2000 look like child's play. That election caused market turmoil:
"In 2000, the S&P 500 Index (SPX) hit a seasonal peak on September 1, then struggled throughout September and October as investors grappled with the same questions they’re having now about what a new president might mean for the markets. The SPX topped out at around 1520 during the first week of September 2000 before falling to 1366 by the week of the November election. That year was a rather strange one because the election didn’t immediately get decided. Gore and Bush fought over the results until mid-December, and the market continued to struggle. That contrasts with 1996, 2004, and 2012, when reelection of an incumbent president brought rallies soon after the election. Between October 1, 2000, and November 1, 2000, the VIX climbed 15%."
Note: Yesterday the VIX, the so-called volatility/"fear index", was up 4% and it's sky-rocketed in the last week.
https://www.google.com/search?q=vix&ie=utf-8&oe=utf-8
https://tickertape.tdameritrade.com/tra ... kets-64581
Since I am very risk-averse, I would wait a few days or at least just DCA. The market does tend to get choppy before a presidential election. I doubt the market will rally no matter the result but it could crash temporarily, especially if the result is close, the aftermath of which would probably make 2000 look like child's play. That election caused market turmoil:
"In 2000, the S&P 500 Index (SPX) hit a seasonal peak on September 1, then struggled throughout September and October as investors grappled with the same questions they’re having now about what a new president might mean for the markets. The SPX topped out at around 1520 during the first week of September 2000 before falling to 1366 by the week of the November election. That year was a rather strange one because the election didn’t immediately get decided. Gore and Bush fought over the results until mid-December, and the market continued to struggle. That contrasts with 1996, 2004, and 2012, when reelection of an incumbent president brought rallies soon after the election. Between October 1, 2000, and November 1, 2000, the VIX climbed 15%."
Note: Yesterday the VIX, the so-called volatility/"fear index", was up 4% and it's sky-rocketed in the last week.
https://www.google.com/search?q=vix&ie=utf-8&oe=utf-8
https://tickertape.tdameritrade.com/tra ... kets-64581
Re: Slipping last few days- time to buy now or wait until after 11/8?
Here is a picture to illustrate this:cheese_breath wrote:If you're investing for the long term a few points up or down now should be insignificant 20-30 years from now.
This volatility...
...shown in a 21 year context (between the red lines).
Re: Slipping last few days- time to buy now or wait until after 11/8?
I should caveat my comment about the VIX. It has indeed increased significantly (about 40%) over the past week and the trend is up but it is still at pretty normal levels of about 19. It went four times as high in 2009, twice as high in 2011 and was at 25 in the spring.
http://seekingalpha.com/article/1233251 ... -to-use-it
http://seekingalpha.com/article/1233251 ... -to-use-it
- Svensk Anga
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Re: Slipping last few days- time to buy now or wait until after 11/8?
Given the perceived lack of enthusiasm for both major party presidential candidates this year, perhaps the smart move is to buy total international now.
Re: Slipping last few days- time to buy now or wait until after 11/8?
But foreign markets seem more spooked than the US.Svensk Anga wrote:Given the perceived lack of enthusiasm for both major party presidential candidates this year, perhaps the smart move is to buy total international now.
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Re: Slipping last few days- time to buy now or wait until after 11/8?
I just converted a lot of my retirement equity holdings to cash, which changes my asset allocation from about 60/40 to 40/60. The election news/poll results have me absolutely terrified and, as I am approaching retirement age I am, to be blunt, really scared about direction. Of course, I can't predict the future. I sold because my terror made me realize that I was no longer comfortable with my current allocation/risk level. I had been thinking about changing my allocation for the past year or so and the recent state of things compelled me to finally do it. I was afraid that if I had "too much at risk" (for me) I might panic sell should there be a crash. I will sleep better tonight.
Re: Slipping last few days- time to buy now or wait until after 11/8?
It's always something. Maybe the OP wants to want until after the December FOMC meeting?
Re: Slipping last few days- time to buy now or wait until after 11/8?
Time Not Timing.
Put the compounding machine to work.
ASAP
Put the compounding machine to work.
ASAP
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
- cheese_breath
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- Joined: Wed Sep 14, 2011 7:08 pm
Re: Slipping last few days- time to buy now or wait until after 11/8?
If you're near retirement 40/60 might be a more appropriate AA for you anyway.goodenoughinvestor wrote:I just converted a lot of my retirement equity holdings to cash, which changes my asset allocation from about 60/40 to 40/60. The election news/poll results have me absolutely terrified and, as I am approaching retirement age I am, to be blunt, really scared about direction. Of course, I can't predict the future. I sold because my terror made me realize that I was no longer comfortable with my current allocation/risk level. I had been thinking about changing my allocation for the past year or so and the recent state of things compelled me to finally do it. I was afraid that if I had "too much at risk" (for me) I might panic sell should there be a crash. I will sleep better tonight.
The surest way to know the future is when it becomes the past.
Re: Slipping last few days- time to buy now or wait until after 11/8?
A good idea if it makes you comfortable. In fact, I would argue that those in retirement who need more than 40% equities to generate expected income are not really in position to retire.goodenoughinvestor wrote:I just converted a lot of my retirement equity holdings to cash, which changes my asset allocation from about 60/40 to 40/60. The election news/poll results have me absolutely terrified and, as I am approaching retirement age I am, to be blunt, really scared about direction. Of course, I can't predict the future. I sold because my terror made me realize that I was no longer comfortable with my current allocation/risk level. I had been thinking about changing my allocation for the past year or so and the recent state of things compelled me to finally do it. I was afraid that if I had "too much at risk" (for me) I might panic sell should there be a crash. I will sleep better tonight.
Re: Slipping last few days- time to buy now or wait until after 11/8?
mj11711 wrote:Haha, I figured I'd get this answer. I thought maybe there are some older folks on here that have noticed a trend around election time over the years ..
Otherwise, I am probably going to buy now since its down anyway.
If you intend to hold for a long time then the difference between now and a few days is unlikely to make any meaningful financial difference in the future. That said, do what makes you comfortable. If you are too reluctant to jump in now then you should wait. If you are comfortable and ready to make the purchase, then go ahead and put your money to work. The market may slide a lot more by the end of the month but you can't look back with regret. You can only learn and move forward with hope.
Re: Slipping last few days- time to buy now or wait until after 11/8?
I think this is great advice from livesoft. As a new BH who's just started moving towards a target AA, I've pondered over timing question a lot and I'm realizing that splitting the difference is a great way to balance the unknowns.livesoft wrote:
Buy some now and buy some later. Then you can say you bought some at the right time no matter what.
Re: Slipping last few days- time to buy now or wait until after 11/8?
+1livesoft wrote:Buy some now and buy some later. Then you can say you bought some at the right time no matter what.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” |
— Warren Buffett
Re: Slipping last few days- time to buy now or wait until after 11/8?
I'm with you. I am waiting until after the election (assuming it actually ends). Between historical October bumpy rides and all the outside influences on the election, I can wait a little while longer to deploy some cash.mj11711 wrote:I mostly invest in Vanguard mutual Funds (total stock index is my main one) and have some funds available to add to the portfolio. I noticed that in the last few days, its been down every day and am thinking of making the buy today. However, with election day coming up - would it be wise for me to wait until after the election results? Is it likely to go up or down at that point?
Re: Slipping last few days- time to buy now or wait until after 11/8?
Dont try to time it. I had a feeling the last few days were going to be bad but put money into the market last week anyway as scheduled.
These little 2-3% swings that you are trying to gamble on are irrelevant to the actual performance of your investment. Instead, the things that you are speculating on are multi year secular bull and bear markets that could end up doubling or halving your money.
These little 2-3% swings that you are trying to gamble on are irrelevant to the actual performance of your investment. Instead, the things that you are speculating on are multi year secular bull and bear markets that could end up doubling or halving your money.
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Re: Slipping last few days- time to buy now or wait until after 11/8?
i intend to buy on the 1st and the 15th (i.e., the week before and the week after), but thats because its when i get paid. i dont plan to change up my normal strategy for this election or any other "major event" that will happen this year or years in the future (they probably come up on a monthly if not weekly basis). why? because if it can be predicted, there are more educated and smarter people than me just waiting to take advantage of it (to the extent it can be), and likely its already priced into the market. i dont consider myself smart enough to take advantage of things like this (to the extent it can be), and if you are posting the question on a forum like bogleheads, i dont think you are either. one of the primary things i took from the investment books i read is that you are playing a chess match against grandmasters with decades of experience and the most advanced technology, and you are blindfolded. dont play that game.
Re: Slipping last few days- time to buy now or wait until after 11/8?
As a reminder, please do not mention the names of any political candidates or parties. See: Politics and Religion
Politics and Religion
In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
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Re: Slipping last few days- time to buy now or wait until after 11/8?
If one believes "the noise" that is going on right now, if Candidate A wins, the markets will be happy and go up. If Candidate B wins, the market will not like it and go down. But as we all know, life isn't that simple. Will the market go up a lot or a little? Will some other big event happen that overshadows the election? Is the likelihood that the Federal Reserve will be raising interest rates in December going to turn into the main focus? I don't know and anyone who tells you they are sure you should invest now or later is selling you a bridge. It is all noise. If you have the spare cash, I would invest tomorrow because history tells us that money in the market sooner is better and the cash on the sidelines isn't earning anything. But that's not based on anything going on in the world. If you really want, split the money into thirds and invest some now, some during the week of the election, and some the week after or some derivative.
In truth, I dollar cost average into the market because it helps me sleep better at night. Well, and I can't exactly lump sum my 401k into the market before I've been paid
In truth, I dollar cost average into the market because it helps me sleep better at night. Well, and I can't exactly lump sum my 401k into the market before I've been paid
Re: Slipping last few days- time to buy now or wait until after 11/8?
+1: We can never say this enough!Toons wrote:Time Not Timing.
Put the compounding machine to work.
ASAP
LOSER of the Boglehead Contest 2015 |
lang may yer lum reek
Re: Slipping last few days- time to buy now or wait until after 11/8?
It could indeed go up or down. Or it could stay the same.mj11711 wrote:Is it likely to go up or down at that point?
Don't time the market. If you have funds you want to invest and you feel the market will go up over the long run (as it always has), get the funds working for you now.
Re: Slipping last few days- time to buy now or wait until after 11/8?
I'd personally invest it now. But you know yourself best. If you will be really really upset if you invest now and there is a short term dip after the election, wait. As long as you won't be even more upset by waiting and there being a short term increase. In the long term, it is not a big deal either way whether you invest now or next week. I'd not make a general practice of trying to time this though...
Re: Slipping last few days- time to buy now or wait until after 11/8?
Following Livesoft's "backhanded" advice, I converted 5-10% of my portfolio from short term corporates to 90 day t-bills. If the stock market goes down I have lots of dry powder to bargain buy (aka rebalance). If nothing happens in the stock market but the Fed does move in December I will have "saved" the lost interest because I will avoid the price decline in the corporates. And if the Fed doesn't move I will have very little cost.livesoft wrote:It's always something. Maybe the OP wants to want until after the December FOMC meeting?
Not market timing - I haven't done anything but buy insurance just like buying TIPS for inflation insurance. Small "insurance premium" paid in order to protect against a large potential loss.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Okay?? Whatever one has to tell themselves.Doc wrote:Following Livesoft's "backhanded" advice, I converted 5-10% of my portfolio from short term corporates to 90 day t-bills. If the stock market goes down I have lots of dry powder to bargain buy (aka rebalance). If nothing happens in the stock market but the Fed does move in December I will have "saved" the lost interest because I will avoid the price decline in the corporates. And if the Fed doesn't move I will have very little cost.livesoft wrote:It's always something. Maybe the OP wants to want until after the December FOMC meeting?
Not market timing - I haven't done anything but buy insurance just like buying TIPS for inflation insurance. Small "insurance premium" paid in order to protect against a large potential loss.
Re: Slipping last few days- time to buy now or wait until after 11/8?
The bad news is that the short term risk of large loss is probably much greater than the upside of modest gain. (see Brexit, US 2000 election)joebh wrote:It could indeed go up or down. Or it could stay the same.mj11711 wrote:Is it likely to go up or down at that point?
Don't time the market. If you have funds you want to invest and you feel the market will go up over the long run (as it always has), get the funds working for you now.
The good news is that any big move will probably be temporary. (see Brexit, US 2000 election)
The issue is whether if you get out you have the discipline to get back in and can time it well. That is a huge "if".
Re: Slipping last few days- time to buy now or wait until after 11/8?
Regarding "not market timing".
Moving money from one fix income security to another for a short period of time to improve liquidity is neither market timing or rebalancing. Many people have checking accounts, money market accounts, CD's and short term bond funds as "emergency funds". They sometimes move the money around usually to gain a little return for slightly less liquidity. That's not market timing. It's done after the interest rates have already moved. Whether or not it is rebalancing depends on one's personal investment policy statement.
If I am buying or selling selling stocks in anticipation of a stock market move it would be market timing. If I buy or sell stocks after the stock market move it is rebalancing.orca91 wrote:Okay?? Whatever one has to tell themselves.
Moving money from one fix income security to another for a short period of time to improve liquidity is neither market timing or rebalancing. Many people have checking accounts, money market accounts, CD's and short term bond funds as "emergency funds". They sometimes move the money around usually to gain a little return for slightly less liquidity. That's not market timing. It's done after the interest rates have already moved. Whether or not it is rebalancing depends on one's personal investment policy statement.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Often it's following the crowd (if buying on an up move) or panicking (if selling on a down move).Doc wrote:Regarding "not market timing".
If I buy or sell stocks after the stock market move it is rebalancing.orca91 wrote:Okay?? Whatever one has to tell themselves.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Oops. If I buy or sell stocks after the stock market move it is rebalancing. Let me try again. If I buy after the stock market moves down or sell after it moves up it is rebalancing.soboggled wrote:Often it's following the crowd (if buying on an up move) or panicking (if selling on a down move).Doc wrote:Regarding "not market timing".
If I buy or sell stocks after the stock market move it is rebalancing.orca91 wrote:Okay?? Whatever one has to tell themselves.
As soboggled said: Doing the opposite may be following the crowd or panicking. Luckily most (all?) Bogleheads are not in that crowd.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
- cheese_breath
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- Joined: Wed Sep 14, 2011 7:08 pm
Re: Slipping last few days- time to buy now or wait until after 11/8?
It might be rebalancing. What are your rebalancing criteria? Do you buy or sell every time the market moves down or up?Doc wrote:Oops. If I buy or sell stocks after the stock market move it is rebalancing. Let me try again. If I buy after the stock market moves down or sell after it moves up it is rebalancing.soboggled wrote:Often it's following the crowd (if buying on an up move) or panicking (if selling on a down move).Doc wrote:Regarding "not market timing".
If I buy or sell stocks after the stock market move it is rebalancing.orca91 wrote:Okay?? Whatever one has to tell themselves.
As soboggled said: Doing the opposite may be following the crowd or panicking. Luckily most (all?) Bogleheads are not in that crowd.
The surest way to know the future is when it becomes the past.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Changing your AA, or selling 5 - 10% in anticipation of a bunch of IFs is market timing. No matter how many ways to try to circle around it to justify what you did.Doc wrote:Regarding "not market timing".
If I am buying or selling selling stocks in anticipation of a stock market move it would be market timing. If I buy or sell stocks after the stock market move it is rebalancing.orca91 wrote:Okay?? Whatever one has to tell themselves.
Moving money from one fix income security to another for a short period of time to improve liquidity is neither market timing or rebalancing. Many people have checking accounts, money market accounts, CD's and short term bond funds as "emergency funds". They sometimes move the money around usually to gain a little return for slightly less liquidity. That's not market timing. It's done after the interest rates have already moved. Whether or not it is rebalancing depends on one's personal investment policy statement.
Re: Slipping last few days- time to buy now or wait until after 11/8?
I removed a post which mentioned the political candidates by name. Please refrain from mentioning political candidates or parties.
- ruralavalon
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Re: Slipping last few days- time to buy now or wait until after 11/8?
Whatever happens on election day or the next day, the effect will likely be temporary.mj11711 wrote:I mostly invest in Vanguard mutual Funds (total stock index is my main one) and have some funds available to add to the portfolio. I noticed that in the last few days, its been down every day and am thinking of making the buy today. However, with election day coming up - would it be wise for me to wait until after the election results? Is it likely to go up or down at that point?
My practice was to invest whenever I had money available to invest.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: Slipping last few days- time to buy now or wait until after 11/8?
I recall the same discussions regarding BREXIT and after a few days it was all forgotten.
Re: Slipping last few days- time to buy now or wait until after 11/8?
i was going to say exactly that.mickens16 wrote:I recall the same discussions regarding BREXIT and after a few days it was all forgotten.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Last edited by Fudgie on Fri Dec 08, 2017 6:33 am, edited 1 time in total.
Re: Slipping last few days- time to buy now or wait until after 11/8?
At the end of september I was expecting a dip followed by a rally. The dip took a lot longer to appear than I thought it would, but it seems we finally got it. Will it dip deeper? Who knows. But I think the odds at this point are in favor of a post-election rally. Sentiment is pretty low at the moment [1] so if that turns around, things should go up. Buy on monday! [2]
[1] http://seekingalpha.com/article/4019859 ... utive-week
[2] Satisfaction guaranteed: if at any time you are not 100% satisfied with this recommendation I will refund you the full amount that you paid for my valuable advice.
[1] http://seekingalpha.com/article/4019859 ... utive-week
[2] Satisfaction guaranteed: if at any time you are not 100% satisfied with this recommendation I will refund you the full amount that you paid for my valuable advice.
Re: Slipping last few days- time to buy now or wait until after 11/8?
All I know is that the S&P has been down nine (9) straight days, the longest losing streak since 1980, despite strong job reports. The record is 12 in 1966 when the market began a prolonged slide.
The VIX has gone from 13 to 22.5 in less than two (2) weeks, though that is not that unusual unless it continues to go up.
Historically, such things don't usually matter, but just saying, I would be a little careful here - to me the downside risk looks greater than the upside reward no matter who wins.
(Though I'm usually wrong when playing Nostradamus.)
The VIX has gone from 13 to 22.5 in less than two (2) weeks, though that is not that unusual unless it continues to go up.
Historically, such things don't usually matter, but just saying, I would be a little careful here - to me the downside risk looks greater than the upside reward no matter who wins.
(Though I'm usually wrong when playing Nostradamus.)
Re: Slipping last few days- time to buy now or wait until after 11/8?
And? If retirement is 20 or more years off, does the fact that you made or lost a little money based on the timing before or after the election going to matter in the long run? No, If retirement is around the corner, if you're worrying about the impact on your portfolio, you need to fix your AA.
Re: Slipping last few days- time to buy now or wait until after 11/8?
I use a "variable" band criteria. It has two parts.cheese_breath wrote:It might be rebalancing. What are your rebalancing criteria? Do you buy or sell every time the market moves down or up?
1) I trigger a rebalancing based on a band around the most recent AA high/low not my target AA. So if my band is 5% and my target AA is 50/50 but the previous AA high was 53/47 I would rebalance if my equity position dropped by 5% or to 48/52. I would then rebalance to 50/50 at that point. The reason I do this is that it seem stupid to me to have a portfolio 4% above target and then having to wait until it to droped by 9% in order to reach the "static" +- 5% point.
2) I am also willing to reduce my bands below 5% in extreme market conditions. Something like Livesoft's really bad day but more like a really bad week. (I also am not likely to look at my AA very frequently so I don't always know what the most recent high/low actually was.)
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Re: Slipping last few days- time to buy now or wait until after 11/8?
Regarding not "not market timing.".
Example: We have a large tax bill twice a year but I don't know how much it is only when it is due. I may move bond assets to shorter duration prior to the due date. I am willing to accept a small loss in interest payments to avoid a "possible" large capital loss if I don't sell my longer term bond position until the due date.
Example: I aggressively tax loss harvest. I may sell an S&P 500 fund and buy a Dow Jones Large Cap (750) to avoid a wash sale. I am willing to accept the small change in my average market cap rather than accept the disallowed tax loss. (I'll move the market cap back to the original as future conditions permit. This usually takes about 60 days as I use tax advantage and taxable pairs to accomplish this.)
Neither of these is market timing. I am not changing my AA and I am not buying or selling assets because I think the market will move in some direction.
I am not changing my AA. I am only juggling the assets within my existing AA in in anticipation of some unknown future event.orca91 wrote:Changing your AA, or selling 5 - 10% in anticipation of a bunch of IFs is market timing. No matter how many ways to try to circle around it to justify what you did.
Example: We have a large tax bill twice a year but I don't know how much it is only when it is due. I may move bond assets to shorter duration prior to the due date. I am willing to accept a small loss in interest payments to avoid a "possible" large capital loss if I don't sell my longer term bond position until the due date.
Example: I aggressively tax loss harvest. I may sell an S&P 500 fund and buy a Dow Jones Large Cap (750) to avoid a wash sale. I am willing to accept the small change in my average market cap rather than accept the disallowed tax loss. (I'll move the market cap back to the original as future conditions permit. This usually takes about 60 days as I use tax advantage and taxable pairs to accomplish this.)
Neither of these is market timing. I am not changing my AA and I am not buying or selling assets because I think the market will move in some direction.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
- saltycaper
- Posts: 2650
- Joined: Thu Apr 24, 2014 8:47 pm
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Re: Slipping last few days- time to buy now or wait until after 11/8?
Of course you're changing your AA. AA is not just stocks versus bonds. That might be the most important part of the AA, but how much in domestic stocks vs. int'l stocks, how much in Treasurys vs. corporates, that is part of your AA too. Changing your AA because you think something might happen in the market that the market is not pricing in already is pretty much the definition of market timing. If that's what you want to do, fine, but be honest with yourself about what you're doing. This scenario has no relevance to your other examples, one of which is motivated by trying to meet a liability and other one is motivated by tax purposes.Doc wrote:
I am not changing my AA. I am only juggling the assets within my existing AA in in anticipation of some unknown future event.
Quod vitae sectabor iter?
Re: Slipping last few days- time to buy now or wait until after 11/8?
Neither of those examples is what you described you're doing in the first post about this. In that post, you exactly described juggling assets in anticipation of some market event. That you don't see that and continue to try and justify it is quite telling.Doc wrote:Regarding not "not market timing.".
I am not changing my AA. I am only juggling the assets within my existing AA in in anticipation of some unknown future event.orca91 wrote:Changing your AA, or selling 5 - 10% in anticipation of a bunch of IFs is market timing. No matter how many ways to try to circle around it to justify what you did.
Example: We have a large tax bill twice a year but I don't know how much it is only when it is due. I may move bond assets to shorter duration prior to the due date. I am willing to accept a small loss in interest payments to avoid a "possible" large capital loss if I don't sell my longer term bond position until the due date.
Example: I aggressively tax loss harvest. I may sell an S&P 500 fund and buy a Dow Jones Large Cap (750) to avoid a wash sale. I am willing to accept the small change in my average market cap rather than accept the disallowed tax loss. (I'll move the market cap back to the original as future conditions permit. This usually takes about 60 days as I use tax advantage and taxable pairs to accomplish this.)
Neither of these is market timing. I am not changing my AA and I am not buying or selling assets because I think the market will move in some direction.
Re: Slipping last few days- time to buy now or wait until after 11/8?
I get your point about AA and personal time frames but:Novine wrote:And? If retirement is 20 or more years off, does the fact that you made or lost a little money based on the timing before or after the election going to matter in the long run? No, If retirement is around the corner, if you're worrying about the impact on your portfolio, you need to fix your AA.
If it doesn't matter in the long run, why the resistance to paying front end commissions and loads?
If it doesn't matter in the long run, what's the problem of postponing new investments a few days or weeks?
I am happy with my AA and don't plan to change it, I just won't be committing new money. I think there is a significant chance we are in for fairly prolonged political instability no matter who wins so it could matter more then we think, more likely for bad than good. I also see little possibility for significant short term gains and a lot of possibility for significant short term losses, which may or may not be recoverable in the long run.
Re: Slipping last few days- time to buy now or wait until after 11/8?
orca91 wrote:Neither of those examples is what you described you're doing in the first post about this. In that post, you exactly described juggling assets in anticipation of some market event. That you don't see that and continue to try and justify it is quite telling.
I changed the duration of my FI portfolio by maybe 1 or 2 months. This buys me insurance to be able to react to some undetermined event in the future should I choose to do so whether that event is a stock market correction or a bill that is unusually high. It is not different than moving my emergency/contingency fund from a CD account to a MM. I don't consider that a change in asset allocation. These kind of changes I make all the time simply from reinvesting dividends.Doc's first post wrote:Following Livesoft's "backhanded" advice, I converted 5-10% of my portfolio from short term corporates to 90 day t-bills.
saltycaper wrote:Of course you're changing your AA. AA is not just stocks versus bonds.
I do not consider whether I use Vg Corp Bond fund or Vg Investment Grade bond fund as a different AA position. Many of my bond funds make larger changes in their portfolio in the normal course of business than the one I made myself. I don't "rebalance" my FI position every three months because a fund publishes its quarterly portfolio. Now if I was changing 20% of my corporate bond allocation to Treasuries on a long term basis that would be a different matter.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.