Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A scenario about market timing and a 5 percent pullback. On day x person A puts 10k in their mutual fund. On day X person B decides to wait for a 5 percent pullback prior to contributing their 10k. Six weeks later the market is up 7 percent and begins the long waited 5 percent pullback over the next two weeks. Person B jumps in with their 10k two month after person A. Who came out ahead? This scenario has played out multiple times of late. With Vanguard you can see the monthly performance of your fund/funds. Was it really what you thought the month before you thought it would be? Wellington is approx 60 equities and 60 percent fixed income. It's recent swoon was from a rise in interest rates overpowering equity performance. Now the equity side is having more influence so what's the future to be? Wellington is balanced so a five percent drop in the stock market need not translate into a 5 percent drop in Wellington.
Most of the financial advisers that I read, listen to are about 50% at cash waiting for a correction. Can't imagine disregarding current economic events and diving in blindlessly is the way to go, especially when the Fed has clearly warned that QE will stop. Just the discussion of QE being tapered caused a big sell off, didn't it? Can you imagine what the market will do when the Fed actually follows through? The same can be said for bonds (long term). Not wise to buy into funds that invest in anything but short term bonds, according to the experts.
Most of the financial advisers that I read, listen to are about 50% at cash waiting for a correction. Can't imagine disregarding current economic events and diving in blindlessly is the way to go, especially when the Fed has clearly warned that QE will stop. Just the discussion of QE being tapered caused a big sell off, didn't it? Can you imagine what the market will do when the Fed actually follows through? The same can be said for bonds (long term). Not wise to buy into funds that invest in anything but short term bonds, according to the experts.
I have a large cash position in addition to putting new money to work. Many of those advisors and hedge fund managers gave been slaughtered waiting for a 10-15 percent correction. The problem with a five percent correction is that it may reverse at at 4.5 percent and be up over 1 percent before you get your money in. This market has seen big swings and folks trying to talk the market down so they can get in. I have money going in weekly and in hindsight I have not suffered trying to time. I will put more in when the market is down etc.
Most of the financial advisers that I read, listen to are about 50% at cash waiting for a correction. Can't imagine disregarding current economic events and diving in blindlessly is the way to go, especially when the Fed has clearly warned that QE will stop. Just the discussion of QE being tapered caused a big sell off, didn't it? Can you imagine what the market will do when the Fed actually follows through? The same can be said for bonds (long term). Not wise to buy into funds that invest in anything but short term bonds, according to the experts.
I should clarify that I do have a chunk of change for a fifteen percent or more correction. ETF's have more flexibility than mutuals as they trade like stocks. The time horizon for tapering keeps getting moved out and the market keeps going up. Listen to financial shows and their reactions to those waiting for the correction that hadn't come as the market keeps going up.
I'm thinking any correction is more likely next year when Janet Yellen steps up to fill Bernanke's shoes, but in actuality she supposedly was the one who helped design the QE bond buying strategy, and so far it's been said that she will continue that road.
I'm a bit leery of her due to her liberal California education, but only time will tell. She seems to have a good head on her shoulders, and assuming the position meaning it's a first time/big step because she's female may cause her to keep the slow, steady, conservative approach on healing the economy.
Of course, If you're one of those Information Clearing House subscribers (like me) then you know that the Fed's actions are only keeping the ship afloat with no meaningful growth, i.e. jobs, etc., and the only thing that's profiting are the markets.
Dunno, dunno.
Having switched everything from JPMorgan to Raymond James, Mom is sending me the first statement so I begin the Excel spreadsheets anew. We will see what they accomplish after selling off our bond funds and reinvesting in mutuals.
BTW we are at a 66 percent cash position. We decided to give Raymond James a run of three to six months to see how they perform.
We're in the middle of a nasty probate fight and closing on a commercial property sale, so after we reinvest on new properties we'll have more for the nest egg.
What is the best fund for somebody who wants to move money from a Retirement Fund into an IRA and begin withdrawing funds every month starting in December. I am be 64 in November and was laid off in March. Because of medical issues, I cannot collect unemployment and will begin receiving Social Security in December. I am with T. Rowe Price - so is their Capital Appreciation a good choice? Right now it is just in a money market.
Most of the financial advisers that I read, listen to are about 50% at cash waiting for a correction. Can't imagine disregarding current economic events and diving in blindlessly is the way to go, especially when the Fed has clearly warned that QE will stop. Just the discussion of QE being tapered caused a big sell off, didn't it? Can you imagine what the market will do when the Fed actually follows through? The same can be said for bonds (long term). Not wise to buy into funds that invest in anything but short term bonds, according to the experts.
Last November I was talking to a co-worker who said both his adviser and the adviser who manages his wife's 401 pulled most of their personal money into cash in anticipation of a giant pullback. So that is what they did as well. I stayed put and have made tens of thousands of dollars as their returns after taxes didn't match inflation.
I am saying nobody, and I mean NOBODY, can predict the market. Since you are in this forum I"m assuming you are older. So yeah, not the time to blindly jump into equities. That's why a solid blended fund like the Vanguard Wellington described earlier may be a better bet. Interest rates will continue to rise slowly but bonds are still a good hedge. Especially with so many baby boomers coming into retirement age and looking to convert to bonds. Supply and demand is still a really strong factor in bond prices.
As for EFTs I have been trying to learn about them. As you can probably tell I'm not interested in the flexibility, I'm 54 and in buy and hold mode. But I don't know a lot about them. Can you give me a quick understanding?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
