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I think you can start buying into this market using yesterday's intraday low as your stop. This looks like a buying opportunity, but we are no longer in the same trading range as before. I would also like to say this isn't true capitulation. There wasn't enough spilled blood, so I wouldn't be surprised if the market goes up a bit then end up hitting resistance and starts reversing back down. However, there is no point in guessing what will happen. I believe you can start to trade this bounce, but watch it very closely to see where/if there is resistance. You should also use a stop slightly below yesterdays intraday low.
I think you can start buying into this market using yesterday's intraday low as your stop. This looks like a buying opportunity, but we are no longer in the same trading range as before. I would also like to say this isn't true capitulation. There wasn't enough spilled blood, so I wouldn't be surprised if the market goes up a bit then end up hitting resistance and starts reversing back down. However, there is no point in guessing what will happen. I believe you can start to trade this bounce, but watch it very closely to see where/if there is resistance. You should also use a stop slightly below yesterdays intraday low.
Could be a "dead cat" bounce. Do you think we could pick up traction after the elections?
why try to rule out uncertainty? plan for it, allow for it . there are lots of ways to plan out portfolio construction for anything but a rip roaring bull market.
the problem folks have is when they bet only on one economic outcome or they drive by looking in the rearview mirror.
going forward i think is not going to be about buying a bunch of index funds and leaving things on buy and die. it is going to be more about not only stock selection but managing your portfolio. you are more likely to have to steer it like nudging a big ship back on course as the seas throw it around.
adjusting to the big picture is likely going to be how we need to play the game.
right now my own portfolio (although i am retiring and cut back equities alot) changes dynamically as the big picture changes.
as an example i am holding quite a bit of bond funds . but through the last few years those funds changed quite a bit from what they were.
through the year high yield bonds have been shed for high quality bonds, interest rate sensitive bond funds have been shortened. small caps were shed quite a while ago. in short the portfolio is in defensive mode as giving up some potential gains is not as important to me as down side protection and having to wait another 15 years to get back to this point like we still have not done since 2000 . waiting more than a decade to retrace is not something i want to do at this stage of my life..
so what if rates on bonds kick up? then that bond money may migrate over to inflation proof securities, reit income funds , commodity funds and maybe even high yield short term funds like fidelity floating rate high yield.
the point is trying to guess whats next is a fools game. better that you learn to play the cards you are dealt in an active way to match the bigger picture.
even if you are wrong about the direction of things you will never get crushed nudging things.
it is when you bet the ranch like the bull continuing and it doesn't or bet on low rates and they don't stay and you leave things static that you get hurt.
which is why i keep a certain amount of money for my speculating in individual stocks as a game but the bulk of it is invested in diversified funds with zero individual company risk,competitor risk and sector risk.
i have always felt being happy is better than being correct and if i have to worry about the fact my portfolio may be a fraction of what it was if i predicted wrong i am not happy. many times winning is not losing and i have always shyed away on making big bets in a buy and hold strategy and always preferred a managed portfolio to a static one.
by managed i don't mean active fund management , etf's and index funds can be fine , i mean by you nudging the portfolio to keep it on course. if you don't fall as much you don't need as much to come back.
i use a newsletter which offers various model portfolios .
right now my income model which is 30% equities is up 4.5% ytd. the growth and income model which is 70% equities is up 2.50% , right now i use 75% income model /25% growth and income model but that can change as we move on.
the growth model i used to use which is 97 % equities is down 1%.
the more speculative unique opportunities model is down 5%.
as you see the more centralized the bets the greater the returns needed just to retrace.
short of a straight up pedal to the metal bull market all models may end up in the middle somewhere as far as return but some are going to follow huge drops and high peaks to get to that middle ground. others may cut right across the middle and take a very enjoyable ride directly to that same point.
my goal has been to take that middle path directly there , i want to be happy , not correct.
Last edited by mathjak107; 10-17-2014 at 03:45 AM..
I've been wanting to ask you this for a long time. When do you sleep?
At work, when working. What I love about MathJak is that he uses the newsletter and professional advice to minimize his hands on management time and exchange spends volumes of time to talk about it.
At work, when working. What I love about MathJak is that he uses the newsletter and professional advice to minimize his hands on management time and exchange spends volumes of time to talk about it.
Peace MathJak!
yep , not having to make investment decisions really frees your mind up. you can learn new things and research other interests . i remember back in the day spending hours planning my next move , then spending hours second guessing myself.
much more fun to didscuss things in general that opposed to contemplating next moves.
we just got back from the bronx zoo. got a lot of photos to work on . i just looked and saw we were up today.. that was a nice surprise.
Last edited by mathjak107; 10-17-2014 at 12:11 PM..
YTD I'm up about 5%, YOY it's about 10%. No stop losses, not trying to catch falling knives. I usually go around not knowing what the market did on a particular day. I'll be in a conversation and talking about how the market is doing pretty well lately (and by that I mean over the last few months) and people will look like I'm crazy and then launch into how they market is down 200 points and this is causing them stress or how this stock or that stock isn't performing. What a headache.
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