CTMLI hope that your portfolios weathered this storm. Here it is June 7, and all of the things that I expected that any reasonable investor would understand about the market and the economy is now coming to full realization. I have no grand insights. I'm like Day 10 into this ^$#!#$^ sinus infection and Day 4 into my antibiotics after my own system failed me miserably! So thinking viscous has been replaced with non-thinking viscous (now where else would you ever read it portrayed that way!).
My portfolio was actually up today, but I'll confess that I've missed out on a big piece of the gains in the market. Trying to time the market is a fool's game. I know that. When you look at the charts and you have the benefit of hindsight it is all so clear. But what you do not have is the asynchronous view of what people were fearing when (collective handwringing, and you've seen it on these pages) v. when the market reacted.
8 comments:
"My portfolio was actually up today, but I'll confess that I've missed out on a big piece of the gains in the market. Trying to time the market is a fool's game. I know that."
SO WHY DO YOU DO IT THEN?
Fair enough question. I suppose there are degrees of timing the market. My approach given my understanding of the environment was essentially to be modestly in the market with a few well-chosen longs that I didn't plan to be married to. Given my expectations of the bond market, I did not feel that having x% in bonds was appropriate risk reduction.
But, I wasn't trying to time precise turns by taking full or leveraged positions one way or the other as many try to do.
And, to be honest, part of being a student of the market, (I profess to be nothing else) is benefiting from the experience of having choices presented to you, making those choices and reflecting on the consequences.
So you are a CLOSET timer, who rationalizes it. Fair enough.
Well the ultimate rationalization is this: it is my money that I'm responsible for, I can be anything and do anything that I want. I accept responsibility for my decisions. I don't HAVE to be in the market 100% of the time. So I can elect to allocation money to investments that have less risk based on my individual situation.
My portfolio was down yesterday, seems to be up (so far) today, BUT I would have been better off if I had not be stopped out of several positions in my qualified accounts.
I think this qualifies me as a closet market timer, except that I don't blame myself, but my trailing stops when I get twisted by my knickers.
The above said, I'm in the camp of Someday (Pretty Soon) We're Going to Have a Big Drop. When that happens, I hope to have cash to pick up on some of the companies that I've been watching, patiently watching, and hope to buy when they go "on sale" i.e., when their prices drop substantially.
I leave my taxable account investments pretty much alone.
The lesson? Best to treat all my monies as taxable. Choose wisely in the first place ( !! ) and let chips fall where they may. Over time, I'll be ahead, maybe substantially ahead.
Gemmastar--good companies do not always remain good companies for a multitude of reasons. Identifying when a company no longer is performing for the reasons that you bought them initially (good management, good technology, favorable sector). I like the concept of ramping into great companies and great sectors and ramping out. George Dagnino uses this methodology very successfully.
Companies can have their fallow periods, that's for sure.
I like to target several companies for my taxable account, buy when they're "on sale," but sell only rarely.
GD's approach is a good one for a qualified account, me thinks. But I'm looking for less homework, so maybe it's not best for ME, although good, maybe even great for THEE.
G--there is surely more than one road that gets one to the right place and everyone has different considerations. This approach works for me; your approach works for you and that is all that matters.
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