ira85
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Posts: 837
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Post by ira85 on Mar 26, 2012 22:01:50 GMT -5
March 22 blygh said "I am cash heavy now and plan to stay that way until after the election." I'm thinking an easy money fed and no action on the federal deficit in an election year may favor equities and limit the downside till after the election. But then, no matter who wins, the stuff may hit the fan. The worst year in the election cycle is the first year. The federal budget will almost certainly experience cuts and we've seen how austerity plays in Europe. And Greece, Spain, and maybe others will again take center stage as the demise of the European union plays out. I'm long equities, cash light now. But I'm expecting to lighten up before the election. -ira
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Post by sd on Mar 27, 2012 20:24:54 GMT -5
You may be right IRA, (I hope you are) because the thinking is the status quo will do everything they can in an election year to grease the wheels to keep folks thinking that all is well and we are on the way to recovery. A look back over 20 years shows that an election year was not necessarily the ticket to profits-noteably both 2000, and 2008 were election years that the market started precipitous declines. It's a common characteristic of us all - Yourself, Blygh, Bankedout's Uncle, Myself -and most traders/investors-Jim Rogers- to take present and past information, and try to extrapolate what we think could be a likelihood in the future. It gives us a sense of control that we feel we can take a course of action (Reduce Risk, Increase Risk) that logically we know is not predetermined. It is just one of many possibilities. From a technical view- The large indexes have continued to trend higher However, a gradual pullback should be considered normal, and perhaps and perhaps be required if the markets were to get to greater levels- Pullbacks would establish a base of support ..... That being said, if one has a perspective that the markets could go even higher this year- say 10-15% further-what is the profit projection? One would also likely be ready to withstand a pullback- The issue becomes , how far of a pullback can one stomach? In order to maintain a position.? Is it worth a future 10% gain from here, to sit tight in a 10% pullback ? What if that pullback breaks even lower? Where does one exit? I recognize that I personally am Risk adverse -and contrary to my trading account- my retirement account has seen some decent gains this past year with some asset allocation swaps from bonds to growth, and now reducing growth- I felt good initially selling some to lock in gains a number of weeks back near the highs. Since then , we've waffled around ,and I've waffled around , and as we get closer to the end of the quarter- I am 2/3 in cash at present, with the remainder mostly conservative- small growth component, the remainder fundamental dividend payers, , income and bonds.
I think it's worth considering taking some off if things go higher, and save that to reallocate on what is an inevitable pullback- an opportunity to purchase more for less$$$$. Of course, I come from the perspective of being 61 years of age, and facing an upcoming retirement -hopefully 6 or more years out, but perhaps sooner- and not by choice.....Thus, my Risk Aversion.
Had I learned to invest at an earlier age, I might have grown comfortable with the greater volatility- Unfortunately, I started in 99 or so, and since most markets qqq,spx are still bruised from a decade + of losses (Indu up some) The models for asset allocation get progressively more conservative as one gets closer to retirement.
My investing history has taught me to beware the market- This has been a 'lost decade' for retirees- praying to get back to even. At this point, I'm comfortable with reducing Risk and locking in some gains.
Depending on your personal circumstances, one should have a disaster "plan" - Let's say you live in the midwest- "Tornado alley" - You never 'expect' it , but what if the totally unexpected occurs? Investors are always exposed to "Tornado Alley" and should have a disaster plan- As I have reviewed the charts of my possible IRA selections for that possible disaster scenarios- (think 2008) I see that the bond selection (amhix) only lost 30% compared to the growth funds- Now that's reassuring- Glad i went to cash in late 2007.
I would agree that cash under the mattress is not san investment approach, but progressive profit taking and capitol preservation has a place as a part of one's market approach-That is ultimately determined by one's Time Horizon- Good Luck! Sd
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Post by sd on Apr 9, 2012 20:01:24 GMT -5
Last week, I further reduced my Risk allotment in my IRA- I actually expected to see a larger sell-off today due to European concerns again rising, and the combined poor jobs report. Retail was down significantly, perhaps directly due to the higher gas prices. Tonight I saw a few minutes on CNBC with Jeremy Siegel/Kudlow- claiming that we don't need improving unemployment for stocks to improve- and to go higher yet . We will see- I was/am hoping for a real "correction" - to perhaps get back in at a discount to where i have sold these past weeks.
Today , my wife and I opened up new ROTH Ira accounts with Scottrade- with monies costed to the 2011 Tax Year. Scottrade offers IRA accounts with no maintenance or inactivity fees, and the focus in this account will be for longer term investing, likely with ETF's or very low expense, no-load funds (Vanguard).
As part of a " Planning for the Future" , we've maxed out our traditional IRA's and the Roth offers tax-free gains- plus accessibility to the principal without penalties.
Taking advantage of any tax-free opportunity is likely just good investing for the years ahead- There's a week left for contributions to 2011- Good Luck, SD
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Post by sd on Apr 10, 2012 19:55:10 GMT -5
Headlines: Dow has dropped 548 pts in 5 sessions (4.8%) SPX has broken support with a 1358 close- support 1340. AA had a positive earnings!
"Worst Day of the Year for Stocks!"
Wow- Nas still up 15% -
Earnings season is just starting- Europe is a concern- Vix is rising- Outflows of mutual funds are rising-
Will the "correction" hit 10%
Is that a time to Buy - and which sectors?
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Post by sd on Apr 11, 2012 19:46:10 GMT -5
Headlines- Market puts in a rally! Dow up 89 to 12805. AA had good earnings- surprised the market! Banks outperform-Rallied and led the mkt- Talk is China may put in a softer landing after all! Of course there is still a nagging concern- once again rising- about Europe/ Spain....... Was today the final Buying opportunity? Or will we find better values with lower prices in the weeks ahead? I will assume we still go lower- Of course, there is a potential that yesterday was the best buy opportunity- I will assume that we need to put in a larger correction.,and that may present a best opportunity for a value buy. SD
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Post by sd on Apr 22, 2012 9:22:58 GMT -5
AAPL is reporting this Tuesday. Outstanding $200 move in 3 months-Wish I had been along for the ride, Should AAPL disappoint on any earnings metric, I expect it will sell off approx 20% to the $500-$520 trend line . Weekly Chart of AAPL-
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Post by sd on Apr 22, 2012 11:50:49 GMT -5
I eased back into the market this week with a few trades- I selected VZ- a dividend paying sideways range stock in a narrow channel. It is coming off a dbl bottom, and has performed well this week- If the mkt weakens, it may see a push in it's price through the range by "Risk-Off' investors. Even though it is in a narrow range, I felt compelled to tighten the stop. I also bot FXI as it pushed above the 4 day consolidation.The market may be saying China won't land hard after all- The last 2 day's price action has not been inspiring- but is higher. FCX would be a secondary China play - and looks weak-
As a spec play, I Bought 300 shares of CPST- a risky penny stock -Ceo was on Fast Money - They make Gas turbines-and I think the downstream plays on the energy shift to come because of Nat gas is an area worth looking into. However, this is simply just a momentum play and not an investment-My view of penny stocks is that of a lottery ticket-
Which brings me to the crux- speculation- individual on chart action, vs speculation on charts combined with a sector theme- Looking at select group in financials- AXP, V,MA, Pay- all are trending, all will benefit from a stable and improving economy
PPG, Dow Chem, DD -all supposedly benefitting from cheap nat gas.
Nat Gas derivzative plays- While the drillers are hurting because Nat Gas is cheap, the spin-offs from a shift in the US Economy to NAT GAS as a way to reduce our exposure to high oil prices should have a lot of legs-
Data storage, cloud computing......SKYY-cloud ETF?
Health care management- SXCI- nice pop there!Likely many related plays.
Despite the "Go Away in May" mindset, following those areas that are still performing should be a focus in my selection. SD
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Post by sd on Apr 22, 2012 20:08:18 GMT -5
China reports Today (Sunday) - I took a position earlier this week seeing the price action start to turn up pre-earnings- Will the expectations be better than anticipated? I have to ask myself, Why did I not go to trade the market uptrenders- Why not narrow the focus to those stocks that are in sectors that are gaining strength?
We've been here before- our attitudes form our beliefs about the markets- so, if we're inclined to believe in a pullback, perhaps we don't look for those that are not pulling back- Because our bias is negative. When our beliefs limit us to see the big picture in a proper perspective- we need new glasses. We need to find the opportunity if it is presented. With 80% of the business' beating expectations- this market can't have a large downside risk- I hope to clear my thinking, and to make some better trades in the day's ahead- I will try to focus on sectors with market strength- vs finding the Dollar General value play- SD
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ira85
New Member
Posts: 837
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Post by ira85 on Apr 22, 2012 22:05:08 GMT -5
Your last post SD was speaking of strength. Your previous post noted some financials. MA looks to be very strong and seems to have kept on that upward track. I've lightened up recently, but I'll watch MA and see if it can break through 440. With nat gas at lows the price advantage over petroleum is substantial. Some businesses are going to profit. Now the task is to figure out which ones. This has some ideas seekingalpha.com/article/319016-industries-and-stocks-that-could-benefit-from-low-natural-gas-pricesThanks. -ira
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Post by sd on Apr 28, 2012 10:06:10 GMT -5
Thanks for the Link IRA- The push for Nat gas adoption is gaining a lot of major publicity- So while the Nat gas supply itself presently is not a good investment, many of the possiblilities in the article will benefit. I understand that WPRT & CMI had a falling out - This week Nat gas futures actually moved up- Don't trust UNG as an investment vehicle though- I would consider a swing in Nat gas -the MLP's should be a less volatile investment- and Im considering an investment in AMLP.
I'm also in the process of considering some longer term/conservative trend trading themes-still using TA as an approach- , I did not manage my short term trading well, and it requires one to be focused on that approach - needing discipline, and time.
Thanks for the Post! - SD
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Post by sd on Apr 28, 2012 13:15:34 GMT -5
With May here, and earnings were generally very good, but the market hasn't roared higher- AAPL & AMZN blew out earnings- Is this the near term peak with the good news all in ? Will profit taking abound on news that shakes up the market? Macro forces- Europe again, Election ahead & looming tax issues, China's growth slowing, QE3-No QE3? Employment recovery is sluggish- Transports are flat-down, That's the Dow theory indicator of what should show continued market recovery $TRAN- Cheap Nat Gas supplies benefitting industrial/energy co's. Coal fired power is being replaced with Nat Gas- Check out PIMCO's brand new fund BOND- note the increasing volumes-investors going for added safety-Is that the smart money? AMHIX is one of the Bond Funds in our companies plan- It is steadily moving higher. Conversely, the VXX is at an extraordinaryLOW. -Too much complacency? is this the sign of a market top? I added some positions on Friday -with the thought that some of these may be able to weather-or even succeed- potential volatility- I decided to trade with some diversity- took what are a mix of partial positions- COST & DG- for the cost conscious consumer- EQIX- was also considering ADP HD - & FRT (a Reit) VZ- dividend payer moving out of it's base PAY- financial transactions- will likely buy either MA,V,AXP in this sector- ppg-industrial coatings processor uptrending And to round it out SKYY- Cloud computing ETF- My entry could have been timed better on most- but if a trend is in effect, I'll try to withstand the temptation to bail out early. However, I will use stops on all positions- Since May is here, that timing could have been better-Potentially I'm stepping in at the "top" of the known good news. For gaining a longer term view on investing, I have been doing reading on various asset allocation approaches-and I believe the ETF/mutual fund route is the simplest way to go. There is a lot of information out there, on building diversified portfolios, asset allocation modeling for different scenarios, time periods etc. Periodic rebalancing to either reduce Risk or to improve results. From the simplest of approaches- To www.bogleheads.org/www.theivyportfolio.com/ - agood read on investing along with the big money, asset allocations, and a number of different timing/rebalancing models. The concept carries through that the big money has a diversified portfolio and uses asset allocation and timing to improve results-ideally beyond the market index average. That's why they have those PHD's to manage their money. I believe both Harvard & Yale suffered large losses in the 2008 markets, despite all that expertise. Can a small investor use a diversified investment approach with periodic reallocation to improve long term results? What if that small investor adopts a timing model that reduces exposure- or shifts allocations based on changes in momentum and relative strength- some sites : WWW.etfprophet.com, www.etftrends.com- have information - momentum trading of etf's and some portfolio construction- lots to learn there I expect- I've simply just browsed the sites- Does one have to use some of the sophisticated programs or online pay services for guidance, or can one simply employ a simplistic approach based on basic chart reading ? For Investments, a weekly chart should guide the trend analysis- Is it possible to have a diversified portfolio, and periodic rebalancing within a start-up or small account? Having an adequate amount of capitol is likely critical- Reducing commissions by fewer trades, or using discount brokers would be necessary as well. For myself, my employer's 401k offers limited mutual fund choices, including some bonds. I am presently bond,cash heavy and small positions- I believe I will expand the allocation to the bond positions, and likely increase the dividend focused area, anticipating a "we're not of the woods " scenario- However, price action will tell the story. Just some musings this Saturday SD
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Post by bankedout on Apr 29, 2012 9:27:43 GMT -5
One way to manage long term holdings would be to use charts where each year of trading is plotted as a bar. If the current bar low is above the prior bar low, you remain in the position. Upon exit, you re-enter when the current bar high exceeds the prior bar high. I noted the transaction points in blue on the chart below. Something to think about if you have the patience to follow this simple strategy.
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Post by sd on Apr 29, 2012 17:06:53 GMT -5
Thanks for the Chart example Bankedout-- That strategy would have saved a lot of folks pain back in 2008! It would be an easy backtest to see the net yield over that 10 & 20 year period. I think just sitting in cash for that duration - although a defensive move- would give up a lot of alternative opportunity to make money- One could possibly take a short position, or choose a non correlated position to go long, assuming similar criteria was in place. Another aspect would be to plot a moving average, and apply a similar criteria- long when price is above the moving average, and trending higher. Out or short when price falls below a declining moving average. Or , use a several moving average cross- it would help one exit with some of the profit of that year, and would get one back in earlier- Simple strategies are most likely to be followed, rather than complex approaches- One would have to back test the strategy over many market periods to see if the end result significantly improves the mkt's average return in that same period. I just reread "The Layman's Guide to Trading Stocks" by Dave Landry, and would recommend it as a simple approach to the market- It is essentially price action- go long with the trend, and throw in a few moving averages- I'd likely opt for a view of the mkt with at least a monthly chart for reference, and might be inclined to go with a weekly chart. Ultimately, one's approach should backtest & exceed the market's performance over the past say 20 years. That's assuming one has 20 years going forward. Of course, that covers several bull and bear market moves, perhaps enough to give a reasonable sense of what the future results could be. One could add different criteria- scale in and scale out vs all-in-all-out . I appreciate the time & the chart- I need to spend some time on my active trades, and my approach-As well as my longer retirement allocations. I haven't been focused on the mkt much of late, and need to allocate some time -
Regards, SD
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Post by bankedout on Apr 29, 2012 18:41:41 GMT -5
OK, here is the "system" applied to the last 30 years of the S&P 500 index. I think the results look promising. Perhaps the real value is it makes you stay put for the really big moves. I'm thinking if you use weekly, monthly, or even quarterly bars to time your trades, you will get chopped up more often. The hardest part of following this method would be the extreme patience required. Maybe you would need to have a small portion of your account where you would actively trade to pass the time.
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Post by sd on Apr 30, 2012 19:36:34 GMT -5
You make an interesting point- Again, thanks for posting the chart- Let's assume we're out of the big uptrend , 88-99, and look at the choppy market since then- This is a good starting point for long term investing methods- I'll try to "backtest" this approach in the not too distant future-a rain day weekend- Also will try some follow up w/some comparisoms on a Monthly/weekly etc. Regards, SD
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