Not a bad strategy, roo, but keep in mind that you may be trying to "catch a falling knife". There's a good chance, in my opinion, that the S&P 500 hasn't hit that bear market bottom yet. Given all this virus uncertainty and the brutal economic data to come, I wouldn't be surprised to see the 500 drop below 2,000 … perhaps even as low as 1,800. The broad-market index closed at 2,488 yesterday...
Am in complete agreement, and appreciate your thoughts. The buying I did was on Monday, Tuesday, and Wednesday. Didn't buy Thursday or Friday. In retrospect, would have been better to buy on Thursday and Friday, not earlier in the week. The strategy certainly changes week to week. Right now, I am actually wanting to see things continue down. Because when it goes up, and stays up for a few days, it gives me the feeling that I need to buy before it goes up even more. I would not mind seeing the DJI drop a percent per day for a couple weeks. Makes my decisions much easier.
Interesting to note that Buffy was a seller of airline stocks last week. He no doubt believes that share prices will fall even further as Delta reports earnings on Thursday, and Southwest later in the month... https://www.investopedia.com/buffett-s-berkshire-hathaway-sells-millions-of-airline-shares-4801909
Let me get this straight. You were worried about STOCK prices crashing, so you bought a STOCK index fund? EGAD! Why didn't you buy into a BEAR fund??? When the market turned at the top back in February, where it first gapped down, I loaded up on Proshares UltraShort S&P 500 ETF and when the market's dive paused and it turned upward around March 20th, I had a 75% gain in my invested dollar. THAT is "re-balancing"!
it's been very unpredictable to say the least. I have an amazing knack for picking losers on winning days and that's in a normal environment, this is far from normal. in my 401k I'm still 70% in, but I have many years for thing to come back. On the side is where I'm basically playing roulette and not that worried about small or short term dings. if I make or lose a couple hondo I'm content to sell off and toss the dart at the wall the next day.
That's not investing (or rebalancing), that's gambling. Proshares UltraShort S&P 500 ETF is a 2x leveraged inverse ETF. Good luck with that when the market starts going back up. And, how do you know when to sell that inverse ETF, and get back into the market? Me, I stick with my asset allocation that fits my age and risk tolerance, currently 55/45. As the market goes down, I rebalance by buying stock to stay in my asset allocation window. When the market goes up, I sell stocks. That's how rebalancing works.
Don't do it, you'll get burned. This fund has nothing to do with volatility, it goes up when the market goes down. Plus, it is leveraged. Finally, it has a 0.89% expense ratio. I wouldn't touch that fund with a 10 foot pole.
ya, I hear you, but I'm not talking about 5 figure gambles here, I'm just goofing around with a side account, I let the pros handle my 401k, so I'm just tinkering around.
Play money is a good idea to scratch the market timing itch. If you keep track of it, it also shows you that market timing doesn't work. BTW: Make sure that the "pros" who handle your 401k are not market timing, and that they don't rip you off with large commissions and expense ratio funds. You want a fiduciary -- hard to find.
Call it what you find comfortable. I'm 72 and have been active in the stock market for 40 years. There's a difference between throwing money into the market, and studying the market and how it telegraphs what's coming. I predicted a major market turn in 1980 within one day of the turn. I predicted the 2007 turn to a "T" including the preceding final new high. I got back into the market in 2010. But it is necessary to be able to read the charts and to watch the indicators. I saw this little correction coming and I got out of ProShares a few days ago. Now I'm back in at a better price and waiting for the market to drop to levels rivaling the 2007-2009 crash. That will take time. The initial hysterical plunge is probably over and the rest will be more gradual. But WARNING: If you don't know how to read charts to see what is likely coming, or you can't or won't watch them daily, and you have not time-tested some favorite indicators, stay out of higher risk hedges like SDS (ticker symbol).
The "pros" need to be careful to avoid lawsuits at times like this. Their fiduciary obligations will lead them to invest your money in an accepted "safe" balance of stocks and bonds. That way they will avoid lawsuits when you lose money, and you WILL lose money, ... just (hopefully) at a somewhat slower rate than what you would have with a portfolio of just stocks. You would be better off to stay in cash until the Dow drops to the 8,000 - 9,000 level, and then start buying with dollar cost averaging.
Are you really thinking that the DJI will drop to the 8,000 - 9,000 level? That would be a 70% downturn from the record high of 29,550.
It has nothing to do with being able to read charts. Market timing doesn't work, period. Some people get lucky, that still doesn't mean market timing works. Try this game, and see how well you do with chart reading skills: https://engaging-data.com/market-timing-game/ Note: I mean no disrespect, I am just trying to spread the word that market timing doesn't work, so people don't get burned and lose their live savings because of emotional decisions to sell/buy..
Buying stocks is gambling too. You buy a stock because your analysis and expectations are that it will gain, but that is entirely dependent upon the market. If the market turns bear and drops, your carefully-picked stock will lose you money. My annuity is not a gamble. It is a contract paying 3.3% for the next 4 years. It can't lose. Same with all fixed assets. Stock is an equity asset and so it fluctuates. It is a gamble. The Proshares reverse fund is no different from investing in any other index fund as far as "gambling" goes, except that it doubles the changes. Market timing can work but you have to know its limitations. You have to be able to distinguish you own informed estimate from your own hope. I've proved it can work with those caveats. Years ago Joseph Granville timed the market. He screwed up ONCE and it ruined his reputation. Ridiculous. I used his method once and eventually I told my broker the market was going to turn. At the time they (E.F.Hutton) subscribed to Granville's "Early Warning". I told my broker she would get a call from Granville saying the market is turning "either Monday or Tuesday". They called Monday. She was speechless. "How did you do it?!!" I told her I used Granville's method. On that date Granville was correct. It was a bear market; brief by some measures, but a bear. In September of 2007 I told my boss and a friend whom I had encouraged to invest in stocks as she never had, that the market was going to turn "next month" (October 2007). I told then it would first make one more all-time-high, and then it would turn down and we would see no more new highs for a few years. I said it was going to dive very deeply. It all happened as I had said and they were able to avoid the huge losses that others suffered. In February, when the market turned and gapped down, I knew it was a bear starting and I took advantage of it. And I'll tell you this right now: you will not see any new market all-time-highs for a long time. You will see a deep market bottom before you see a new all-time-high. And this drop has only begun. It's interesting that people who cannot correctly identify market tops and bottoms all say "market timing doesn't work. Period." Isn't it?
Early trading in the futures market shows all three major indices up strongly. Your Dow futures up nearly 300 points at the moment. S&P 500 futures up 38 (1.5%)...
I'm having an issue wrapping my head around the possibility of a 9k dow, we have a potus and govt that are doing everything in their power to avoid that. care to elaborate on your thought process there please?
I find it interesting that a person who claims he knows how to market time and has effectively done so in the past has resorted to an annuity at 3.3% annually.
If I were doing this I would stay in cash till the market settles in around some number. It would probably be a day where the market gains 5 or 10 points after the seesaw. Now .... What stocks to buy when you get back in? I am not in the market. It drives me nervous.
Technicals. Have you noticed that they HAVE been throwing everything they can at it and it still went down?
It's "interesting" to anyone who doesn't understand diversification. You should have a variety of investments including equities (stock, real estate maybe REITs), fixed assets (T-bills held to maturity, annuities, mortgage contracts, bonds) and a little precious metals and speculative investments. The mistake made by neophytes is investing all their assets in one type of vehicle. My investment in the Proshares bear fund is 18% of my assets. My investment in the fixed annuity is another 18%.
I guess I’ll just have to ride out Obama’s economy. Isn’t that what Democrats have been saying since oh....the minute it tanked. Now it’s Trumps economy I guess? What say you now biotches You hypocrite, pandering, don’t wanna day its? Who’s economy is it now and who’s economy was it in January before we knew what a Coronavirus was? Hey CNN? Hey NYT? Hey WAPO? HEY MSNBC? Hey forum trolls? Who’s economy is it now when you were all saying it was all Obama’s doing and Trump was just riding his wave? Did all your beliefs and justifications just end suddenly?
