slomove Posted August 9, 2011 Share Posted August 9, 2011 (edited) ....Now I just have to figure out when to jump back in. Any suggestions? Good question. I transferred 401 already in February to a "Stable Value" fund when I got nervous. Missed out on a temporary gain in the meantime but also on the huge drop. But I would really like to get back in the game I was wondering about an automated strategy to buy 10% of my portfolio every time one of my funds loses 10% and sell accordingly when it gains. But that would be too easy and I bet somebody tried that before and it does not work :jester: I just don't have the patience to watch all that shit all the time. Can somebody just give me the money, please? Edited August 9, 2011 by slomove Link to comment Share on other sites More sharing options...
Croc Posted August 9, 2011 Share Posted August 9, 2011 Now I just have to figure out when to jump back in. Any suggestions? Hi Skip - you have just asked one of the more challenging questions in investing. Lots of people can tell you they time the stock market - in reality they get lucky. Your equation for timing is really based on what the forecast for price/earnings ratio will be. If you think earnings will improve then you bet the economy will not go into recession and you are buying today. If you think earnings will fall because of us having a double dip recession then stay out of the market until you reverse that forecast view to an economic growth view. The technique I use when not really sure about a market's future direction is a "dollar cost averaging" http://en.wikipedia.org/wiki/Dollar_cost_averaging As for Slomove's automated strategy approach, unfortunately that will not work. There have been some very good academic studies that show how difficult it is to time the market based on a rules approach to investing. A couple of alternatives exist: (a) Motley Fool's Dogs of the Dow value investing approach is well tested and I use actively as a part of my investment thinking. You can take these principles and apply them with some common sense in most markets. http://www.fool.com/school/dowinvesting/dowinvesting.htm The Motley Fool website is also a good one for general education. (b) The theory behind index funds which is really another play on dollar cost averaging with low transaction and management fees. Try https://personal.vanguard.com/us/insights/investingtruths to read up more. © Technical trading or charting stock prices is another market-timing strategy that seeks to identify resistance and support reference prices for decisions to buy (price hits the support) or sell (price hits the resistance). There are lots of vendors selling black box software that purports to help the user win against the market. Mostly snake oil at a retail investor level. Those charting trading solutions which require critical thinking by investors are more successful simply because it is you making the decision based on a series of facts that a software program helps you sift through. These guys have had a positive influence on my thinking over the years and have helped me identify market factors to make decisions: http://www.safetyinthemarket.com.au/ Link to comment Share on other sites More sharing options...
Croc Posted August 9, 2011 Share Posted August 9, 2011 Were loooooong term. DB Pension plan. You are nicely positioned. No matter what the investment markets do your retirement benefit is fixed based on when you retire and length of service up to that point. Only issue is whether your company can afford to pay the benefits. So many have converted DB plans over the years to DC plans simply to save costs. I got burned this way by a previous employer. Link to comment Share on other sites More sharing options...
Kitcat Posted August 9, 2011 Share Posted August 9, 2011 I hired a financial adviser and now he does the worrying. He kinda reminds me of Croc. Up til then I was the classic, sell low, buy high investor (Panic and sell as market bottoms out, finally regain confidence and buy back in, just as the market is peaking, over and over, sigh). Link to comment Share on other sites More sharing options...
Croc Posted August 9, 2011 Share Posted August 9, 2011 He kinda reminds me of Croc. He must be suave and good looking? :cooldude: :jester: Link to comment Share on other sites More sharing options...
Z3 Stalker Posted August 9, 2011 Share Posted August 9, 2011 Check this link out; it may make you feel better, then again maybe not!!!! http://www.wtfnoway.com/ Link to comment Share on other sites More sharing options...
twobone Posted August 9, 2011 Author Share Posted August 9, 2011 outrageous! How low can you go (or how high depending on your approach to viewing a balance sheet). Link to comment Share on other sites More sharing options...
twobone Posted August 9, 2011 Author Share Posted August 9, 2011 Time to add a bit of levity Link to comment Share on other sites More sharing options...
Kitcat Posted August 10, 2011 Share Posted August 10, 2011 Croc: I will give you "suave":). Link to comment Share on other sites More sharing options...
WestTexasS2K Posted August 10, 2011 Share Posted August 10, 2011 You are nicely positioned. No matter what the investment markets do your retirement benefit is fixed based on when you retire and length of service up to that point. Only issue is whether your company can afford to pay the benefits. So many have converted DB plans over the years to DC plans simply to save costs. I got burned this way by a previous employer. Our employer contributes a set amount and it hasnt changed for 22 years. We on the other hand have upped our contributions multiple times over the years. We are a well funded plan with wise conservative investments that have done well over the years. We are in real danger of losing our DB plan due to political pressure from all the money managment firms. We have a total of 3 Trillion invested by Texas public pension plans. On average we pay 2-3 basis points to our money managers. If they are succesful in crushing our DB plans and force us to DC plans then most of that money will be forced in to 401k plans which usually includes Mutual funds which charge 1-3% and plus other hidden fees. This comes out to Billions more dollars in management fees. So when you start hearing politians/f***((( liars say that DB plans are responsible for all the worlds woes. Its just a pack of lies. We have hired actuary firms to run the numbers and It will save the local goverments zero dollars and usually will increase cost after 8-10 years. Link to comment Share on other sites More sharing options...
Mondo Posted August 10, 2011 Share Posted August 10, 2011 I always think that if there is a "formula" for timing the market, then it would get screwed up if everyone tried using it. Kind of like those big swings because everyone's computer threshold has been met and then it keeps perpetuating itself. I'm part of a very large pension plan but can't help feeling my "experts" got screwed by Goldman Sachs experts. Link to comment Share on other sites More sharing options...
speedwagon Posted August 10, 2011 Share Posted August 10, 2011 Mondo; You have experts and professionals mixed up---there are no experts working for others that I know of except perhaps BRK. Link to comment Share on other sites More sharing options...
Mondo Posted August 11, 2011 Share Posted August 11, 2011 I do stand corrected on that Link to comment Share on other sites More sharing options...
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