U.S. stocks continue to soar!

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rockstar
Posts: 1157
Joined: Mon Feb 03, 2020 6:51 pm

Re: U.S. stocks continue to soar!

Post by rockstar »

willthrill81 wrote: Sat Aug 22, 2020 2:35 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm
TheTimeLord wrote: Sat Aug 22, 2020 11:44 am
Robot Monster wrote: Sat Aug 22, 2020 10:57 am
Semantics wrote: Sat Aug 22, 2020 3:05 am
I agree, I want to avoid these sectors...
What are QQQ sectors, I wondered, versus what's in grandpa's fuddy-duddy S&P index.

------------------------------QQQ----------VOO
Information Technology----48.24%------27.50%
Communication Services----19.67%-----10.90%
Consumer Discretionary-----17.06%-----11.20%
Health Care--------------------7.23%-----14.60%
Consumer Staples-------------4.88%-----7.10%
Industrials & Utilities----------2.66%-----11% (7.90%+3.10%)

QQQ is missing S&P's: 2.5% Energy, 9.90% Financials, 2.50% Materials, 2.80% Real Estate and therefore missed out on this YTD action,
Energy -39.02%
Financials -20.93%
Materials -0.02%
Real Estate -11.38%

Sources:
https://www.invesco.com/us/qqq-etf/holdings/
https://investor.vanguard.com/etf/profile/portfolio/voo
Which is why I started using QQQ, not to have more Tech (explicitly) but to have less of certain sectors. Yesterday afternoon I started building the Jäger Fund and made my initial 4 purchases (no individual stocks in these initial purchases).
Yep.

After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
marcopolo
Posts: 3873
Joined: Sat Dec 03, 2016 10:22 am

Re: U.S. stocks continue to soar!

Post by marcopolo »

rockstar wrote: Sat Aug 22, 2020 4:02 pm
willthrill81 wrote: Sat Aug 22, 2020 2:35 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm
TheTimeLord wrote: Sat Aug 22, 2020 11:44 am
Robot Monster wrote: Sat Aug 22, 2020 10:57 am

What are QQQ sectors, I wondered, versus what's in grandpa's fuddy-duddy S&P index.

------------------------------QQQ----------VOO
Information Technology----48.24%------27.50%
Communication Services----19.67%-----10.90%
Consumer Discretionary-----17.06%-----11.20%
Health Care--------------------7.23%-----14.60%
Consumer Staples-------------4.88%-----7.10%
Industrials & Utilities----------2.66%-----11% (7.90%+3.10%)

QQQ is missing S&P's: 2.5% Energy, 9.90% Financials, 2.50% Materials, 2.80% Real Estate and therefore missed out on this YTD action,
Energy -39.02%
Financials -20.93%
Materials -0.02%
Real Estate -11.38%

Sources:
https://www.invesco.com/us/qqq-etf/holdings/
https://investor.vanguard.com/etf/profile/portfolio/voo
Which is why I started using QQQ, not to have more Tech (explicitly) but to have less of certain sectors. Yesterday afternoon I started building the Jäger Fund and made my initial 4 purchases (no individual stocks in these initial purchases).
Yep.

After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Once in a while you get shown the light, in the strangest of places if you look at it right.
rockstar
Posts: 1157
Joined: Mon Feb 03, 2020 6:51 pm

Re: U.S. stocks continue to soar!

Post by rockstar »

marcopolo wrote: Sat Aug 22, 2020 4:52 pm
rockstar wrote: Sat Aug 22, 2020 4:02 pm
willthrill81 wrote: Sat Aug 22, 2020 2:35 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm
TheTimeLord wrote: Sat Aug 22, 2020 11:44 am

Which is why I started using QQQ, not to have more Tech (explicitly) but to have less of certain sectors. Yesterday afternoon I started building the Jäger Fund and made my initial 4 purchases (no individual stocks in these initial purchases).
Yep.

After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
marcopolo
Posts: 3873
Joined: Sat Dec 03, 2016 10:22 am

Re: U.S. stocks continue to soar!

Post by marcopolo »

rockstar wrote: Sat Aug 22, 2020 4:59 pm
marcopolo wrote: Sat Aug 22, 2020 4:52 pm
rockstar wrote: Sat Aug 22, 2020 4:02 pm
willthrill81 wrote: Sat Aug 22, 2020 2:35 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm

Yep.

After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
Bogle's predictions about market returns were also often wrong, appealing to authority is also not a good support for your point.

"Sometime in the future" is very different than a 5 year projection. You referenced a 5 year projection. Care to share what that source was projecting 5 years ago?
Once in a while you get shown the light, in the strangest of places if you look at it right.
User avatar
willthrill81
Posts: 22672
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: U.S. stocks continue to soar!

Post by willthrill81 »

rockstar wrote: Sat Aug 22, 2020 4:59 pm
marcopolo wrote: Sat Aug 22, 2020 4:52 pm
rockstar wrote: Sat Aug 22, 2020 4:02 pm
willthrill81 wrote: Sat Aug 22, 2020 2:35 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm

Yep.

After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
rockstar
Posts: 1157
Joined: Mon Feb 03, 2020 6:51 pm

Re: U.S. stocks continue to soar!

Post by rockstar »

willthrill81 wrote: Sat Aug 22, 2020 5:15 pm
rockstar wrote: Sat Aug 22, 2020 4:59 pm
marcopolo wrote: Sat Aug 22, 2020 4:52 pm
rockstar wrote: Sat Aug 22, 2020 4:02 pm
willthrill81 wrote: Sat Aug 22, 2020 2:35 pm

Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
Which is why I sell based on moving averages, not PE.
rockstar
Posts: 1157
Joined: Mon Feb 03, 2020 6:51 pm

Re: U.S. stocks continue to soar!

Post by rockstar »

willthrill81 wrote: Sat Aug 22, 2020 5:15 pm
rockstar wrote: Sat Aug 22, 2020 4:59 pm
marcopolo wrote: Sat Aug 22, 2020 4:52 pm
rockstar wrote: Sat Aug 22, 2020 4:02 pm
willthrill81 wrote: Sat Aug 22, 2020 2:35 pm

Investing in growth indices at any point in time would be considered by some to be performance chasing.

My father has been a bona fide performance chaser for many years via mutual funds, and he's definitely outperformed the market. He doesn't even have a defined strategy, making it even more remarkable to me at least.
It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
User avatar
willthrill81
Posts: 22672
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: U.S. stocks continue to soar!

Post by willthrill81 »

rockstar wrote: Sat Aug 22, 2020 5:43 pm
willthrill81 wrote: Sat Aug 22, 2020 5:15 pm
rockstar wrote: Sat Aug 22, 2020 4:59 pm
marcopolo wrote: Sat Aug 22, 2020 4:52 pm
rockstar wrote: Sat Aug 22, 2020 4:02 pm

It will fail at some point. Current projections based on PE look like zero returns for the next five years. Side 6:

https://am.jpmorgan.com/blob-gim/138340 ... M_3Q20.pdf

What's important is to have a plan for when to bail. You will most likely lose money on recent purchases and incur capital gains tax on older purchases in taxable. But it's something to mentally prepare oneself for. I have no clue what will cause it to fail in the future. I didn't expect the market to rebound so fast this year. I received nasty grams from my 401k provider for excessive trading when I dump at the 300 day moving average and bought back in at a lower PE. I didn't expect to make so many moves so quickly. This stuff usually takes a bit more time.
I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
marcopolo
Posts: 3873
Joined: Sat Dec 03, 2016 10:22 am

Re: U.S. stocks continue to soar!

Post by marcopolo »

willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm
willthrill81 wrote: Sat Aug 22, 2020 5:15 pm
rockstar wrote: Sat Aug 22, 2020 4:59 pm
marcopolo wrote: Sat Aug 22, 2020 4:52 pm

I have no doubt growth will underperform (and over perform) at various times in the future. Referencing JP Morgan's projections for 5 years out seems a pretty weak argument to support when that might occur. What were they projecting 5 years ago?
Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
Once in a while you get shown the light, in the strangest of places if you look at it right.
rockstar
Posts: 1157
Joined: Mon Feb 03, 2020 6:51 pm

Re: U.S. stocks continue to soar!

Post by rockstar »

marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm
willthrill81 wrote: Sat Aug 22, 2020 5:15 pm
rockstar wrote: Sat Aug 22, 2020 4:59 pm

Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.
marcopolo
Posts: 3873
Joined: Sat Dec 03, 2016 10:22 am

Re: U.S. stocks continue to soar!

Post by marcopolo »

rockstar wrote: Sat Aug 22, 2020 6:18 pm
marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm
willthrill81 wrote: Sat Aug 22, 2020 5:15 pm

History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.

Whatever works for you.

I would just point out that a lot of very smart people with lots of resources spend their full time working careers to develop such quantitative approaches. Very few consistently beat a passive approach doing so.

Certainly possible that you will develop one of those rare methods, and stick to it.

For me, I choose an asset allocation (AA) I am comfortable with, use a +/- 5% band to re-balance. Buy at desired AA when i have excess cash, sell at desired AA when i need money to spend. Simple, but fairly effective.

Good luck in your search for a better mouse trap.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: U.S. stocks continue to soar!

Post by willthrill81 »

marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm
willthrill81 wrote: Sat Aug 22, 2020 5:15 pm
rockstar wrote: Sat Aug 22, 2020 4:59 pm

Look at Bogle's predication in his Little Book of Common Sense Investing. He takes a PE approach as well. Higher PE tends to result in lower gains in the future. There is an assumption that PEs will return to their average at some point over a ten year period, which pushes down gains. This is something to think about. Of course, when the market is going up every day, folks find these predictions much harder to believe.
History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
My gut beat buy-and-hold. :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Third Son
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Re: U.S. stocks continue to soar!

Post by Third Son »

rockstar wrote: Sat Aug 22, 2020 6:18 pm
marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm
willthrill81 wrote: Sat Aug 22, 2020 5:15 pm

History has shown, quite robustly, that valuations are not reliably mean reverting. Heck, we don't even know which mean they might revert to (e.g. the last 10, 20, 50, 100, etc. years?).

Further, seemingly high valuations do not preclude good returns, and apparently low valuations can be followed by poor returns.

Shiller, the 'discoverer' of CAPE, was predicting negative real returns for U.S. stocks from 1996-2005, yet his prediction was very wrong, despite the 2000-2002 pullback.
What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.
oy vey :oops: This is too much work.....
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
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willthrill81
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Re: U.S. stocks continue to soar!

Post by willthrill81 »

Third Son wrote: Sat Aug 22, 2020 6:49 pm
rockstar wrote: Sat Aug 22, 2020 6:18 pm
marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm

What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.
oy vey :oops: This is too much work.....
It's all relative. It takes a lot of work to earn the funds to invest in the first place.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: U.S. stocks continue to soar!

Post by abuss368 »

I will be backing up the truck again soon!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: U.S. stocks continue to soar!

Post by rockstar »

marcopolo wrote: Sat Aug 22, 2020 6:33 pm
rockstar wrote: Sat Aug 22, 2020 6:18 pm
marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm
rockstar wrote: Sat Aug 22, 2020 5:43 pm

What's your approach to buying and selling?
I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.

Whatever works for you.

I would just point out that a lot of very smart people with lots of resources spend their full time working careers to develop such quantitative approaches. Very few consistently beat a passive approach doing so.

Certainly possible that you will develop one of those rare methods, and stick to it.

For me, I choose an asset allocation (AA) I am comfortable with, use a +/- 5% band to re-balance. Buy at desired AA when i have excess cash, sell at desired AA when i need money to spend. Simple, but fairly effective.

Good luck in your search for a better mouse trap.
I have trouble thinking about an AA approach with bonds approaching zero yields especially on the short end of the curve. Instead of using an AA to reduce my draw down, I'm looking at moving averages to sell to reduce draw downs. That's it. I'm not trying to beat passive. I'm trying to figure out how to move forward in a world with near zero yields.
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Third Son
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Re: U.S. stocks continue to soar!

Post by Third Son »

willthrill81 wrote: Sat Aug 22, 2020 7:01 pm
Third Son wrote: Sat Aug 22, 2020 6:49 pm
rockstar wrote: Sat Aug 22, 2020 6:18 pm
marcopolo wrote: Sat Aug 22, 2020 6:03 pm
willthrill81 wrote: Sat Aug 22, 2020 5:56 pm

I provided that in this thread, which is now closed. PM me if you wish to discuss it.
And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.
oy vey :oops: This is too much work.....
It's all relative. It takes a lot of work to earn the funds to invest in the first place.
Sure... I found the work part quite enjoyable. If you enjoy the complexity of chasing yield more power to you.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
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jason2459
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Re: U.S. stocks continue to soar!

Post by jason2459 »

That was all well and good but to the point... Is the market efficient? To some degree yes and to some degree we don't know.

I really enjoy researching and listening to Dr. Fama as he's very realistic and honest about this hypothesis and constantly researching how the market is efficient. Or not.

This was a good debate
Is the market efficient:
https://youtu.be/bM9bYOBuKF4

If the answer is no, will it really change how you're investing? If the answer is yes, will it really change how you're investing?

It really shouldn't and at the end of the day even Dr. Fama will admit many could or should just "sit" with the total market and could be the "perfect" portfolio for that person but could be adjusted from there because of "taste."
https://youtu.be/dj-RO4mh-wA
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: U.S. stocks continue to soar!

Post by TheTimeLord »

For TLH reasons I stopped using VOO and VTI in my Vanguard accounts and started using VV and VONE. I was curious how the "Four Horseman of Tax Loss Harvesting" were performing YTD relative to each other. Drumroll please, here are the results.

VTI - 6.16%
VOO - 6.44%
VONE - 6.95%
VV - 7.85%
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
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JoMoney
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Re: U.S. stocks continue to soar!

Post by JoMoney »

jason2459 wrote: Sun Aug 23, 2020 12:00 am That was all well and good but to the point... Is the market efficient? To some degree yes and to some degree we don't know.

I really enjoy researching and listening to Dr. Fama as he's very realistic and honest about this hypothesis and constantly researching how the market is efficient. Or not.

This was a good debate
Is the market efficient:
https://youtu.be/bM9bYOBuKF4

If the answer is no, will it really change how you're investing? If the answer is yes, will it really change how you're investing?

It really shouldn't and at the end of the day even Dr. Fama will admit many could or should just "sit" with the total market and could be the "perfect" portfolio for that person but could be adjusted from there because of "taste."
https://youtu.be/dj-RO4mh-wA
It changes things very little for those 'averaging' the market, I don't think I can beat the market, not because it's "efficient", but because it's highly competitive and I have no advantage or unique information.
It makes a huge difference for people investing on the premise that the market is efficiently pricing "risk premiums", believing they earn higher "premiums" by ratcheting up their risk.
It makes a difference to how vulnerable people are to being taken advantage of when they diverge into more idiosyncratic choices. In an efficient market there is "idiosyncratic risk", but in an in-efficient market there are vultures actively preying on weak participants, 'pump and dump' scams, a market for lemons, boiler rooms, shady salesmen, etc...
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: U.S. stocks continue to soar!

Post by jason2459 »

Or you're saying in the short term the market is not efficient, it is irrational, and trading causes wild speculation. Very much a behavioral issue. And it could be said, in the long run the market is efficient enough that buy and hold investors can stay the course and have reasonable and rational expectations.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: U.S. stocks continue to soar!

Post by Third Son »

JoMoney wrote: Sun Aug 23, 2020 8:50 am
jason2459 wrote: Sun Aug 23, 2020 12:00 am That was all well and good but to the point... Is the market efficient? To some degree yes and to some degree we don't know.

I really enjoy researching and listening to Dr. Fama as he's very realistic and honest about this hypothesis and constantly researching how the market is efficient. Or not.

This was a good debate
Is the market efficient:
https://youtu.be/bM9bYOBuKF4

If the answer is no, will it really change how you're investing? If the answer is yes, will it really change how you're investing?

It really shouldn't and at the end of the day even Dr. Fama will admit many could or should just "sit" with the total market and could be the "perfect" portfolio for that person but could be adjusted from there because of "taste."
https://youtu.be/dj-RO4mh-wA
It changes things very little for those 'averaging' the market, I don't think I can beat the market, not because it's "efficient", but because it's highly competitive and I have no advantage or unique information.
It makes a huge difference for people investing on the premise that the market is efficiently pricing "risk premiums", believing they earn higher "premiums" by ratcheting up their risk.
It makes a difference to how vulnerable people are to being taken advantage of when they diverge into more idiosyncratic choices. In an efficient market there is "idiosyncratic risk", but in an in-efficient market there are vultures actively preying on weak participants, 'pump and dump' scams, a market for lemons, boiler rooms, shady salesmen, etc...
I wholeheartedly agree with this perspective. There are several pundits on this site that try to game the system only to find that chasing nickels and dimes gets you nowhere. Work hard....invest steadily...don't try too hard. It all works out in the end. Those who think they have better ideas chasing small percentages per year on a "high" interest online bank accounts or hesitating to invest because the market is "overpriced" are fooling themselves. I would rather others be competitive and watch my investments grow with indexing.
"A part of all you earn is yours to keep" | | -The Richest Man in Babylon
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Re: U.S. stocks continue to soar!

Post by Robot Monster »

rockstar wrote: Sat Aug 22, 2020 2:24 pm After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
I was pondering this. I think it comes down differences in goals and perspective. Let me talk about mine. This is where I'm coming from: I'm more than happy to sacrifice performance for increased safety. Global investing, rather than investing in the US alone (let concentrating in various US sectors), is a "spread your eggs in more than one basket" play. You may say international hasn't worked for a while. Depends on your definition of worked, I guess. This works for me:

Inflation adjusted CAGR of Global ex-US Stock Market
Jan 2015 - Jul 2020: 1.99%
Jan 2016 - Jul 2020: 3.6%
Jan 2017 - Jul 2020: 3.91%
Jan 2018 - Jul 2020: -3.20%
Jan 2019 - Jul 2020: 5.91%
“There are no answers, only choices.” ― Stanislav Lem, Solaris
rockstar
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Re: U.S. stocks continue to soar!

Post by rockstar »

Robot Monster wrote: Sun Aug 23, 2020 1:05 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
I was pondering this. I think it comes down differences in goals and perspective. Let me talk about mine. This is where I'm coming from: I'm more than happy to sacrifice performance for increased safety. Global investing, rather than investing in the US alone (let concentrating in various US sectors), is a "spread your eggs in more than one basket" play. You may say international hasn't worked for a while. Depends on your definition of worked, I guess. This works for me:

Inflation adjusted CAGR of Global ex-US Stock Market
Jan 2015 - Jul 2020: 1.99%
Jan 2016 - Jul 2020: 3.6%
Jan 2017 - Jul 2020: 3.91%
Jan 2018 - Jul 2020: -3.20%
Jan 2019 - Jul 2020: 5.91%
How does that work for you? I'm doing better than that in WFC preferred stock, and I don't have currency risk.
Last edited by rockstar on Sun Aug 23, 2020 2:00 pm, edited 1 time in total.
Robot Monster
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Re: U.S. stocks continue to soar!

Post by Robot Monster »

rockstar wrote: Sun Aug 23, 2020 1:09 pm
Robot Monster wrote: Sun Aug 23, 2020 1:05 pm
rockstar wrote: Sat Aug 22, 2020 2:24 pm After spending some time here, I get the gist of the responses. I don't think buying QQQ is chasing performance. You're buying what's working. If you go out and intentionally buy something that hasn't worked for a while, what do you call that? Value investing? What do you do if it performs even worse? Hold the course? I can see why folks will go out and buy the entire market. They'll get lower gains because they'll buy a whole lot of stuff that isn't working, but some fraction of what they buy will work. They'll make some return. Of course, this isn't really the case if you buy some international that hasn't worked for a long time. You can hope that some fraction of it works out. Of course, anything you buy at the top and hold to the bottom will do poorly whether it's QQQ, VOO, or GLD.

I'm sticking with buying what's working and holding until it fails. Then, I will bail with a plan to buy back in or buy something else. I'm not going to cash because we hit some new market highs.
I was pondering this. I think it comes down differences in goals and perspective. Let me talk about mine. This is where I'm coming from: I'm more than happy to sacrifice performance for increased safety. Global investing, rather than investing in the US alone (let concentrating in various US sectors), is a "spread your eggs in more than one basket" play. You may say international hasn't worked for a while. Depends on your definition of worked, I guess. This works for me:

Inflation adjusted CAGR of Global ex-US Stock Market
Jan 2015 - Jul 2020: 1.99%
Jan 2016 - Jul 2020: 3.6%
Jan 2017 - Jul 2020: 3.91%
Jan 2018 - Jul 2020: -3.20%
Jan 2019 - Jul 2020: 5.91%
How does that work for you? I'm doing better than that is WFC preferred stock, and I don't have currency risk.
Currency risk is a feature, not a bug. It's a form of diversification. International currency hedged funds exist, but aren't favored; most people want the diversification. Currency "risk" offers USD inflation protection, for instance (obviously not guaranteed, but could). I'll also add that the USD is currently strong in relation to most other major currencies, with the notable exceptions of Sweden and Switzerland's. It's not an entirely insane thing to grab those other currencies while they're relatively cheap. :happy Going by the Economist's Big Mac index, as of June, the Japanese yen was 36.3% undervalued compared to the USD, and the British pound was 25.1% undervalued.

I'm unsure if Wells Fargo preferred stock is necessarily safer than owning an entire global market of common stock, simply because of the "putting all of one's eggs in a single basket" factor. Personally, I would not feel comfortable betting the farm on a single company, whether that be in the form of stock, preferred stock, or even bonds.
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Re: U.S. stocks continue to soar!

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Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
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Re: U.S. stocks continue to soar!

Post by CurlyDave »

Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
I am impressed. I was worried that there would be a little bit of a pause after last week's action, but here we are again.

Warming up that antigravity machine.
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Re: U.S. stocks continue to soar!

Post by sailaway »

CurlyDave wrote: Sun Aug 23, 2020 9:11 pm
Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
I am impressed. I was worried that there would be a little bit of a pause after last week's action, but here we are again.

Warming up that antigravity machine.
Don't worry, it is payday week for several of us. Markets gotta be up for that 401k contribution. My bad karma can't protect you after this paycheck, though, as it will be the last full control for the year.
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Re: U.S. stocks continue to soar!

Post by TheTimeLord »

CurlyDave wrote: Sun Aug 23, 2020 9:11 pm
Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
I am impressed. I was worried that there would be a little bit of a pause after last week's action, but here we are again.

Warming up that antigravity machine.
There is a high probability that I will be adding to my holdings tomorrow. Need to spend a little time considering my alternatives.
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Re: U.S. stocks continue to soar!

Post by CurlyDave »

TheTimeLord wrote: Sun Aug 23, 2020 9:46 pm
CurlyDave wrote: Sun Aug 23, 2020 9:11 pm
Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
I am impressed. I was worried that there would be a little bit of a pause after last week's action, but here we are again.

Warming up that antigravity machine.
There is a high probability that I will be adding to my holdings tomorrow. Need to spend a little time considering my alternatives.
Don't forget to talk it over with TINA before you make any decisions.

(Just as an aside, I actually have a second cousin named Tina in real life. I haven't seen her in 60 years, but back in my early teens her beauty was very great.)
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Re: U.S. stocks continue to soar!

Post by willthrill81 »

Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
Aw, really?? I wanted my payroll contributions to hit first, and that won't happen until at least Tuesday!

Oh well. Beggars can't be choosers.
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Re: U.S. stocks continue to soar!

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Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
Futures now showing +20 pts for the S&P 500, looks like 3300's might be in the rear view mirror. How I do, enjoy those mornings where I make more than my monthly pay before I roll out of bed in the morning :D .
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Re: U.S. stocks continue to soar!

Post by CurlyDave »

mrspock wrote: Mon Aug 24, 2020 2:25 am
Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
Futures now showing +20 pts for the S&P 500, looks like 3300's might be in the rear view mirror. How I do, enjoy those mornings where I make more than my monthly pay before I roll out of bed in the morning :D .
You know it! Sort of feels like it is raining gold nuggets and all I have to do is go outside and pick them up.
Last edited by CurlyDave on Mon Aug 24, 2020 8:47 am, edited 1 time in total.
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Re: U.S. stocks continue to soar!

Post by lostdog »

:moneybag today.

29x expenses here we come.
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Re: U.S. stocks continue to soar!

Post by Hyperchicken »

S&P at 3425 right off the bat. :shock: :moneybag
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Re: U.S. stocks continue to soar!

Post by ReformedSpender »

F-R-O-T-H-Y
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.
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Re: U.S. stocks continue to soar!

Post by columbia »

Via Larry Swedroe


Image
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Re: U.S. stocks continue to soar!

Post by lostdog »

Small pullback at the moment.
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Re: U.S. stocks continue to soar!

Post by Stinky »

Forester wrote: Thu Aug 20, 2020 5:41 am Ominous double top formation... this thread won't see 170 pages for a very long time. Now that the ATH was breached the mania wears off and introspection begins. SPX 3,400 waits for another year (decade?).
3400 waited for all of two trading days.

Not 10 years.
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Re: U.S. stocks continue to soar!

Post by HomerJ »

Third Son wrote: Sat Aug 22, 2020 7:42 pm
willthrill81 wrote: Sat Aug 22, 2020 7:01 pm
Third Son wrote: Sat Aug 22, 2020 6:49 pm
rockstar wrote: Sat Aug 22, 2020 6:18 pm
marcopolo wrote: Sat Aug 22, 2020 6:03 pm

And also when your gut tells you to? :beer
It's hard to come up with quantitative measures and strictly follow them. The psychological aspect of investing is super tough. Right now, I'm toying around with the idea of using the 20 day moving average for selling TQQQ. My current strategy has been to buy on big dips and sell when I make more than 10%. I recently sold, and it moved up $9 dollars since I sold it. It hasn't had a big dip yet, and the VXN has dropped below 30 and stayed there for a little bit. I feel much more comfortable being in a 3x leveraged ETF when the volatility is low. I did 5 trades with TQQQ with this strategy, so even with short term gains tax on a portion of this strategy, that's still a good after tax return for the taxable portion. It's even better in my roll over IRA. I split the strategy across both and started with 5% of my total portfolio.

For VOO I use the 300 day moving average to sell. I do think there is some truth to realizing higher returns with lower PEs at least for indexes like the S&P 500. That's probably far less the case for QQQ. However, buying back at a lower basis is still a good thing. The market moved way too fast, so I had a lot of wash sales.

I do think the market will tank again in the future. I now feel confident in using the 300 day for VOO, which now only makes up 10% of my asset allocation. I'm not sure if I want to repeat what I did in March, where I sold QQQ when VOO crossed below the 300 day moving average and stayed there for a couple of days. I also bought back both when the S&P 500 hit a PE of 20x. I did this over the course of a couple of days.

Putting this down here makes me think about this stuff. I make a lot of mistakes, and folks here are smart enough to point them out to me. I'm definitely getting out of fixed assets. I have 5% in WFC preferred that I will carry through the end of this year and at least half of next year. I did go the CD route for some of my portfolio and chased yield. I won't be doing that again. Lesson learned. Thankfully, I mostly bought 3 month treasuries that I easily sold early.
oy vey :oops: This is too much work.....
It's all relative. It takes a lot of work to earn the funds to invest in the first place.
Sure... I found the work part quite enjoyable. If you enjoy the complexity of chasing yield more power to you.
There are rules in most work. You CAN get very good at your work, with practice. It's easy to be confident in your knowledge and skill.

Investing is much harder... Systems that seemed to work in the past almost always stop working going forward. Very little makes sense. You try to find patterns with limited data, and hope the rules of the system doesn't change in the middle of your investment period.

I've gotten rich the easy way. Buy and hold has made me wealthy. So far, the only constant has been that the market goes up over time, in the long run. This makes sense to me as billions of humans go to work each day and input their work into the global markets, making them more valuable over time.

If getting rich slow and steady isn't good enough for you, come up with a better system, and try to get rich quick. But using a system (or your gut) DOES risk you making less, and maybe even not getting rich at all. But good luck to you.
Last edited by HomerJ on Mon Aug 24, 2020 9:56 am, edited 1 time in total.
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Re: U.S. stocks continue to soar!

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Tech in reversal and weighing down the index.
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Re: U.S. stocks continue to soar!

Post by mrspock »

ReformedSpender wrote: Mon Aug 24, 2020 8:54 am F-R-O-T-H-Y
E-M-O-T-I-O-N-S. I suggest you ignore them.
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Re: U.S. stocks continue to soar!

Post by whodidntante »

lostdog wrote: Mon Aug 24, 2020 9:55 am Tech in reversal and weighing down the index.
When are people going to stop buying those dogs? :wink:
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Re: U.S. stocks continue to soar!

Post by whodidntante »

It's a new all-time we must be high! :sharebeer
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Re: U.S. stocks continue to soar!

Post by TheTimeLord »

CurlyDave wrote: Sun Aug 23, 2020 11:01 pm
TheTimeLord wrote: Sun Aug 23, 2020 9:46 pm
CurlyDave wrote: Sun Aug 23, 2020 9:11 pm
Stinky wrote: Sun Aug 23, 2020 8:54 pm Based on futures market tonight, it looks like we will be SOARING again tomorrow.

New highs are ahead!
I am impressed. I was worried that there would be a little bit of a pause after last week's action, but here we are again.

Warming up that antigravity machine.
There is a high probability that I will be adding to my holdings tomorrow. Need to spend a little time considering my alternatives.
Don't forget to talk it over with TINA before you make any decisions.

(Just as an aside, I actually have a second cousin named Tina in real life. I haven't seen her in 60 years, but back in my early teens her beauty was very great.)
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Re: U.S. stocks continue to soar!

Post by TheTimeLord »

The S&P Equal weight index measured by Invesco S&P 500® Equal Weight ETF (RSP) is still well below its February high.
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Re: U.S. stocks continue to soar!

Post by TaxingAccount »

whodidntante wrote: Mon Aug 24, 2020 10:10 am It's a new all-time we must be high! :sharebeer
Is now a good time to buy with the RSI over 70? Thank you.
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Re: U.S. stocks continue to soar!

Post by minimalistmarc »

TaxingAccount wrote: Mon Aug 24, 2020 12:00 pm
whodidntante wrote: Mon Aug 24, 2020 10:10 am It's a new all-time we must be high! :sharebeer
Is now a good time to buy with the RSI over 70? Thank you.
You need a plan. Then ignore RSI
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Re: U.S. stocks continue to soar!

Post by whodidntante »

TaxingAccount wrote: Mon Aug 24, 2020 12:00 pm
whodidntante wrote: Mon Aug 24, 2020 10:10 am It's a new all-time we must be high! :sharebeer
Is now a good time to buy with the RSI over 70? Thank you.
Now is an incredibly risky time to own U.S. stocks. Just like always. :D

I noticed that my U.S. stocks dropped 35% or more earlier this year. The equity risk premium does not come for free.

RSI is not relevant for my investing strategy, however. What are you doing?
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Re: U.S. stocks continue to soar!

Post by Stinky »

It’s looking like a melt up to the close.

This is the 8,000th post on this thread. With many more to come I trust.
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