This recovery is kind of crazy. To all the market timers in this thread who sold in March, did you get back in? If you did, when? How did you know when to get back in? Or are you still sitting on the sidelines waiting for the next crash?
Thanks for the article Joe. As of today I'm up about 8.9% but I'm sitting on 50% cash because I am aware of what your article is about. There is to much uncertainty right now for me to what to be fully invested. What we are seeing in the market now is Fed driven. It's not reality. To those who are new and thinking about jumping in the market I say " walk slowly and try not to get caught up in the high flyers as it is a good chance others will make a ton of money and leave you holding the bag.
Carnage today in the stock market. Is the market predicting a second covid wave? It seemed like it predicted the first wave pretty well. Or is it just getting realistic, after getting too euphoric in the last few weeks? Nobody knows. In the mean time, I sit tight with my pre-determine asset allocation according to my risk level, and buy every two weeks when I get my paycheck. Hang in there, everyone!
https://www.cnbc.com/2020/06/10/stock-market-futures-open-to-close-news.html Nobody has a clue what's going on. NPR Marketplace is going with Aliens lol I think the surge was just robotraders running on preCovid algorithms.
I've been cash, bonds and day trading since late February. I'm planning for a small rise in stocks tomorrow, and then another 7 - 8% drop next week. Then I'll start buying. Maybe.
One of my all-time favorite quotes about investing and the stock market came from JFK's old man, Joe Kennedy, in the winter of 1928... You know it's time to sell when shoeshine boys give you stock tips. Of course, the market tanked soon after in 1929. That said, I should've known a big sell-off was imminent when I saw this on Tuesday... https://twitter.com/i/status/1270350291653791747 LOL
He was a little late to the party. I bought Penn about 3 weeks ago , kept for a 29% run up and sold it. It started tanking a couple dates later. I did have two winners yesterday BYRN and CASH. I could talk about my losers, but, you know how we are. Why jeopardize Guru status if you don't need too. LOL
Doesn't look like great news to start the week... https://www.yahoo.com/finance/news/stock-market-news-live-june-15-2020-222141593.html These COVID numbers are simply not getting better in a lot of places... including one Tulsa Oklahoma...
Remember when the "expert" said not to buy because the DOW was headed to 9000? Hopefully nobody listened.
Stock tips are always a bad idea. Do you your own research if you're actively managing your investments. We're still up for the week, there's still an upward trend, and the economy is still purring.
None of that means anything. If anyone wants to see why market timing doesn't work, they just have to read this thread. It doesn't matter how much of "your own research" you are doing, you still won't be able to tell whether the market will go up next week, go down or stay the same. That's why the smart thing to do is to set your asset allocation of low cost index funds, according to your risk tolerance, and buy and hold. Oh, and a nice side effect is that it is actually the easiest thing to do, because it takes the decision making out of the process.
Of course it means something. It's not certain, but financial people use things like moving averages and models for a reason. So yeah, the data could point in one direction, and an external force like a virus or Federal Reserve intervention could send it in the opposite direction, or maybe the analysts were wrong. Financial markets are non-deterministic. I've used index funds before and continue to do so, but you still need to do your due diligence. The biggest thing is weighting. Also,there are always individual stocks that will outperform those funds. I invested in Nowegian Cruise Lines and United Airlines. One has far outperformed the markets. The other has not.
Yes, financial markets are non-deterministic. That's why they can't be timed. Yes, there are individual stocks that outperform the market. There are more individual stocks that under-perform the market. How do you know beforehand which of the two you have? Nobody knows. That's why the majority of stock pickers get below market return. So, if you can't time the market, and if you can't predict which stocks will outperform or under-perform the market, the best strategy is to just buy the market through a index fund, and count on the stock market on average going up with time. Sounds easy, doesn't it? Why do most people not adhere to that simple formula? Because the financial advisors tell them that nobody wants to be average. Thus, they pay a financial advisor 1-2% of their return, so somebody else can market time and pick stocks for them, with no better result and adding management risk to the equation. Why would anyone do that? Because they have been convinced that they can't handle their portfolio themselves.
I have used index funds and I highly recommend them for those who are new. I would recommend a small position in the QQQ if your a believer in the coming of the 5G buildout next year. Dollar cost averaging of the SPY is gives you good exposer to the overall market and is a good indicator to check your risk tolerance. Two don'ts I highly recommend for new comers is to not trade on margin. If you miss a hot stock today there are others in the pipeline. To not liquidate your portfolio when the market sells off. It is part of the natural cycle of things. Market crashes are a great time to buy stocks at fire sale prices if you know the companies you wish to buy when the opportunity comes. I myself, now, buy my own stocks. I have some money in cash, some in bonds, some in metals. I have one group which are my core holdings and are long term holds of 3 to 5 years. They go up and they go down but they are good solid companies and I know they will survive no matter what. I wont lie, but, I have the luxury to nibble on some of the speculative stocks but I try not to get greedy with them. I've been burned a couple times and is one reason I only play with what I can afford to lose. (Which isn't much). My spec stock this year has been ZOOM which I jump in and out of. Hope you all are doing well trading now. Any option traders out there with good advice?
My strategy is pretty simple. I have a margin account, where I trade, and an IRA where I invest. The IRA is dead simple. It is allocated evenly into four index funds. I never sell in that account. I add the max annual contribution each year, and divide it equally amongst the 4 buckets. The margin account is where I trade. There, it doesn't matter to me what the overall market is doing. As long as it's moving, I make money. I look for stocks that are volitile, and capitalize on that volitility. I never hold any stock overnight in my margin account, I am 100% out by the end of the day. I will say that the last 4 months have been the best I have ever seen for trading.
I have some VTSAX, which is the mutual fund analog of the SPY ETF. It is good to know that one owns some of the total market. As to market timing and stock picking: it is perfectly fine to do it with some play money, to scratch the itch for "beating the market". Just don't do it with the fund you need for retirement.
Bad day for the stock market yesterday, and futures are down again for today. Is the market predicting a second covid wave? Or, it could be just normal volatility?
It's signaling it's overbought and take some money of the table and hold it as there are more opportunities down the road. Latest wave of virus and shutdowns are causing to much uncertainty. I went to about 15% cash this morning.
