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Old 11-17-2009, 01:05 PM
 
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So after reading some of the comments on this thread, it seems apparent that a lack of planning is really only a small part of the issue. Few of us seem to have the knowledge to make good investment choices. We have also seen that many of the pros got fooled and are no smarter. With a volatile, unpredictable economy, even past success may not provide much confidence in the reliability of future decisions. I am trying to use an advisor for the first time and am still not confident in making the best choices. My advisor is advising caution and a heavy commitment to bond and other secure investments. Of course, I now wish that I had an even higher percentage of equities.
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Old 11-17-2009, 01:15 PM
 
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yep once again people learned the pros dont have those crystal balls either...

thats why its important for you to realize no one can time things...

you need an asset allocation plan that works for you , you need your investments matched to your time frames and you need all the asset classes covered as well as what lets you sleep at night. . stop trying to time things.

rebalance once a year and turn off all the talking heads and daily crap then go enjoy your life .

these morons will have you buying and selling and trying to get in and out and you will be spinning your wheels going no where.

yes there are good planners out there but you really have to search to find them..

i know only 1 or 2 myself


in my opinion If you dont think your funds will be much higher in 15 years from today which is what i consider the minimum time frame for equities then you dont belong in equities.

im retiring next year but my equity positions are going to be for eating 15-30 years from now. anything closer is bonds ,cash , annuities.

i couldnt care less what the markets are doing with a 15 year time frame. compare any 15 year period and see how much your up even at the low of that year. its incredible the growth.

buy and hold of even the middle of the road funds is about 1100-1300% since 1987 when i started. un-managed low cost index funds would probley have done even better as the fund managers made mistakes along the way for sure.

Last edited by mathjak107; 11-17-2009 at 01:52 PM..
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Old 11-17-2009, 02:13 PM
 
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Quote:
Originally Posted by mathjak107 View Post
rebalance once a year and turn off all the talking heads and daily crap then go enjoy your life .

these morons will have you buying and selling and trying to get in and out and you will be spinning your wheels going no where..

Ah, but in a sense, isn't that in and of itself market-timing?

If you start with an asset allocation plan of 30% equities, and at the end of a good year, your portfolio consists of 50% equities, you are going to sell off some of that to bring it back down to 30%, and then reinvest those gains in a different area that performed poorly that year.

That, my friend, is market-timing. It is just doing it on an annual basis rather than throughout the year.

Note that I'm not necessarily disagreeing with your general advice to have an asset allocation plan and to rebalance it periodically; I am just disagreeing with your characterization of it.
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Old 11-17-2009, 02:22 PM
 
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technically anything is market timing but if you rebalance by date regardless and not based on where you think markets are headed by jumping in and out of the markets or basing your decisions on daily events you will do just fine.

i dont consider myself a market timer but i do knudge my mix of funds based on the funds objectives and manager changes or even my own comfort levels and goals if i want a permanent reduction in my mix of assets. . granted i guess that could be considered trying to predict something but i think everything we do or the fund manager has a certain amount of that built in.

the rebalancing is more to bring down the percentages of asset classes if they are more then my goal calls for.

if stocks grew to 50% from 25% of the mix its more then my target goals and so i rebalance.

i think everyone understands the difference between trying to time markets vs rebalancing back to your goals or knudging a portfolio slightly as the big picture of things change. market timing is taken as more in or out. ....

Last edited by mathjak107; 11-17-2009 at 02:36 PM..
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Old 11-17-2009, 04:44 PM
 
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rebalancing can use various trigger points also, not just how far over or under you are from your prefered percentages in each asset class.

although we are retiring a year or so from now i estabilished my 3 buckets about 4 years ago... once we start actually withdrawing money from the buckets in retirement my rebalancing will then be based on years of spending money left in buckets 1 and 2.

bucket 1 is 7 years of withdrawls in safe money in banks,cd.s moneymarkets

bucket 2 is 7 years of bonds, bond funds , un-traded reits and annuties of sorts.

bucket 3 equities, reits, commodities.

whenever markets are up i can sell a little equities and refill buckets 1 and 2 if buckets 1 and 2 are full then it dosnt matter to me anymore how high bucket 3 goes ... i can let bucket 3 accumulate for years if i want.

all rebalancing can be based on years of money in buckets 1 and 2.


some may prefer to let buckets 1 and 2 run down quite a bit and let 3 run un-balanced until 1 and 2 are just about empty. thats 15 years later ...

my preference is ill probley do it periodically and not go for the biggest gains by waiting.....
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Old 11-18-2009, 03:10 AM
 
72,291 posts, read 72,222,083 times
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as madman of bethesda pointed out almost anything we do in our investment lives has some market timing smell to it . so lets see how you can tell if you are really a dirty little market timer at heart...

if you turned off all the financial news,and had no idea if we were up or down and you took all emotion out of the equation and you still would have done the same thing anyway then we wont call you a dirty little market timer.

setting a comfort level of say for example 25% each in stocks, bonds, cash and gold and rebalancing each year back to your origional percentages regardless of where you think we are headed next we wont call you a dirty little timer.


rebalancing by years of money in your spending buckets dosnt make you a timer.

if you make changes to your portfolio without thinking im doing this to outsmart the markets and im going to get a better return then the markets themselves we wont call you a timer.

i thru the decades take my actively managed portfolio as opposed to my 4 asset class like the one above and i knudge it and fine tune it based more on my lifes changes then what markets are doing

over the last few months as we ready for the decent into retirement land i decided to make my portfolio less volatile from here on in.


i sold off my small cap fund, i sold my china fund , i bought more of my blue chip style funds. i bought more of fidelity low priced stock fund which has 20% in foreign stocks as opposed to owning a single country fund.

these are more based on lifestyle changes then whether i think we are going up from here or down. even if we were in the middle of the greatest bullmarket in history my decision would be the same.


but when you try to time jumping in or out of the market and think your going to try to do better then what the markets would normally give you because you know where we are headed next then you may be a dirty little market timer

when you make big weighted investments in certain areas of industry or sectors because you believe you know whats coming next you may be a dirty little market timer.

when you think you know just the right company to buy , at just the right time , in just the right sector , in just the right market sentiment , you may be a dirty little market timer.

when you sit with all your money in one asset be it stocks, real estate bonds or just have everything in cash in the bank and you keep your fingers crossed that you made the right decision, you may be a dirty little market timer. ,

i should let jeff foxworthy finish the rest... ha ha ha

Last edited by mathjak107; 11-18-2009 at 03:59 AM..
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