Not Buying - Not Selling - Waiting

[Gretsch]

Time in the market or timing the market?

The age old question.

As a practical observation, the saying is more useful as an indicator than as a statement of fact.

"It's time in the market, not timing the market" they say. If that's true then it signals a top. If it's false then it signals a bottom.

Just my practical observation having seen a few cycles now.

I moved my superannuation, which is simply in a fund not self managed, to cash in January for the record. Outside of that, my actively traded account is about half invested at present.

Yes I meant timing the market.

I started investing in the market in 2014 so this is my first experience of a fall. I was lucky enough to have sold a property at the start of Covid and invested most of it then, so I did well.

Sounds like you’ve got a few years on me.

 

[Mohammed Hazabig'un]

Yes I meant timing the market.

I started investing in the market in 2014 so this is my first experience of a fall. I was lucky enough to have sold a property at the start of Covid and invested most of it then, so I did well.

Sounds like you’ve got a few years on me.

Even the best Timers of all

Yes I meant timing the market.

I started investing in the market in 2014 so this is my first experience of a fall. I was lucky enough to have sold a property at the start of Covid and invested most of it then, so I did well.

Sounds like you’ve got a few years on me.

Timing can be a fools errand, but you'd notice a lot of Members here got out before the Covid crash and back in after. Picking the top of the Market last year (August) was easy for most Id say.
That said I wouldn't want to recommend it as flies in the face of research - you either learn Momentum Trading, see @tech/a or @Skate threads, learn Value Investing like @Value Collector or Buy n Hold like @systematic advices.

Market time at your own peril, I know from experience.

 

[Gretsch]

I consider it is associated with an individual's psychology. We all have our own bias and those drive us to certain conclusions.

For what it is worth, somewhere in one thread I uploaded a spreadsheet which I created as an exercise just to see what would happen. It involved buying 100 units of STW (and later I added VAS & VGS) at the beginning of each month starting in January 2002 so it would cover the GFC and other events. I haven't kept the spreadsheet but I remember it showed at the end of FY 2021 a holding of abit 23,500 units and an income (cash only no franking or other components) of over $40k with the total cash income for the entire period of 21 years being close to $500k. Probably not to bad for essentially doing SFA.

Can I ask you if your portfolio bottomed during the GFC or was it still showing capital gain?

 

[Smurf1976]

Sounds like you’ve got a few years on me

I learned the hard and expensive way in the year 2000 with the tech stocks crash.

That was particularly painful since I'd thought the runup to be irrational myself but trusted that the experts (financial advisor, fund managers etc) must know more than me. Unfortunately that turned out to be a wrong assumption - walked away with a substantial loss in the end.

Suffice to say that taught me a lot about market tops.

As a general rule:

Bond market peaks first.

Stocks peak second.

Commodities peak last.

If the mainstream public are excited about stocks and piling in meanwhile the bond market tops out well then taken together that's a huge warning sign. Doubly so if there's a major rise in energy prices underway given that historically that has preceded not all but many major tops.

All those signs have been present recently.

 

[Belli]

Can I ask you if your portfolio bottomed during the GFC or was it still showing capital gain?

I don't know to be honest. It probably did drop. I'd need to create a spreadsheet to find out and put simply I don't think it matters all that much now. Keep in mind the focus of my late wife and myself was dividend income (still is for me) so we were buying as much as we could. Same with the SMSF but we were using as much of the very generous concessional contributions available at the time so we were plonking in $60k+ each per year for a while. Those two actions likely distort calculations. Only LICs then until two ETFs the first being STW in 2002.

The 2000 tech wreck didn't affect us really as I don't think the LICs held much in the way of them. Never understood the tech stuff anyway so didn't look at any of them from an investment point of view.

 

[Joe Blow]

The posts on guitars can now be found in the Anyone play guitar? thread. Feel free to continue the discussion there.

 

[frugal.rock]

Suffice to say that taught me a lot about market tops.

As a general rule:

Bond market peaks first.

Stocks peak second.

Commodities peak last.

If the mainstream public are excited about stocks and piling in meanwhile the bond market tops out well then taken together that's a huge warning sign. Doubly so if there's a major rise in energy prices underway given that historically that has preceded not all but many major tops.

All those signs have been present recently.

A few questions I've been pondering;

1. Very recent top in bonds, but is that likely to be the peak?

2. Same for stocks and commodities.

3. Pundits saying energy prices likely to still rise considerably. I don't see that changing until renewables are firmly in control ?
(I've mentioned "the last hurrah" for fossil fuels previously, and we seem to be in the start of that drawn out process)

So I'm wondering, whilst all the signs are there, it seems to me, that possibly we still have a ways to go?
Like a Bollinger, does the upwards stretch still need to occur again to gain the tension for the colossal snap back?

I must admit, I'm correlation flummoxed by inflation, rates, yields, geo affected etc
Ukraine and sanctions seem to be an ongoing process from which full flow down financial implications haven't arrived yet.

But, is the dust settling a little from the major changes on the many fronts of this year?
What's priced in already and what isn't?

What does it all mean? ????‍??

 

[Belli]

What does it all mean?

 

[frugal.rock]

Thanks laddy... found myself applying the appropriate tune when reading the caption...?

 

[divs4ever]

Thanks laddy... found myself applying the appropriate tune when reading the caption...?

more appropriate than comfortable , sadly

 

[divs4ever]

What does it all mean? ????‍??

uncertainty , it LOOKS like fabricated volatility , to what end ??

trying to flush the punters ( and retail investors ) into bonds paying trivial coupons so that capital can be trapped ( say 10 year bonds becoming 20 or 30 year bonds without an interest rate adjustment , or 30 years becoming 100 year investments )

they are getting so practiced at kicking the can , why not include bond maturity dates

BUT what MIGHT happen is a total collapse of trust , currency , government banks , and any sort of officialdom

 

[Dona Ferentes]

Whereas with respect to market conniptions, I find myself comfortably numb.

There's a lot of noise out there.

 

[Smurf1976]

So I'm wondering, whilst all the signs are there, it seems to me, that possibly we still have a ways to go?

My basic thought is "markets don't move in a straight line".

Lots of warning signs and we've seen that followed with a now ~20% decline in the stock market as measured by the S&P500.

My guess is before too long we get a good buying opportunity and a proper rally. That doesn't mean the issues are resolved and that we're off and running for a decade long bull market, not even slightly, it just means a decent rally.

Just my guess.

 

[Knobby22]

My basic thought is "markets don't move in a straight line".

Lots of warning signs and we've seen that followed with a now ~20% decline in the stock market as measured by the S&P500.

My guess is before too long we get a good buying opportunity and a proper rally. That doesn't mean the issues are resolved and that we're off and running for a decade long bull market, not even slightly, it just means a decent rally.

Just my guess.

Usually though there is a bear market rally first, that wipes out the remaining positive sentiment so I will be very wary. I fell for one back in the late 80s.

 

[waterbottle]

It's coming.

The storm is o'er the horizon and the sea is choppy.

The US Fed is planning to allow bonds to mature and run-off their $9T balance sheet, although some commentators have said that this isn't going to be enough to stem inflation, stating that an active sell-off will be required. The run-off will be done at a cap of $50 billion/month initially, before it increases to $90billion later in the year, composed of a combination of bonds + MBS.

All of this done in an effort to stem inflation. Janet Yellen has, in the past day or two, come out and admitted that she incorrectly forecasted inflation as transitory. The Fed has made similar comments. Alot of the blame seems to be resting at the feet of the Russian-Ukraine war.

Meanwhile, Larry Summers has offered his 2c, stating that it will be impossible to control inflation without inducing a recession. Some commentators believe recession is already apparent (in France), whilst other economic data points to decreased discretionary spending (German retail spending down) thanks to increases in the cost of energy.

Has anyone changed their strategy so far?

 

[Gretsch]

What would a rational investor do.
Get out or sit it out?

 

[divs4ever]

i am still nibbling i can't afford to sit and wait , nor to completely vaporize the investment cash , and meanwhile i don't trust the banks when they come under pressure ( especially when they have formulated 'bail-in' laws )

 

[divs4ever]

It's coming.

The storm is o'er the horizon and the sea is choppy.

The US Fed is planning to allow bonds to mature and run-off their $9T balance sheet, although some commentators have said that this isn't going to be enough to stem inflation, stating that an active sell-off will be required. The run-off will be done at a cap of $50 billion/month initially, before it increases to $90billion later in the year, composed of a combination of bonds + MBS.

All of this done in an effort to stem inflation. Janet Yellen has, in the past day or two, come out and admitted that she incorrectly forecasted inflation as transitory. The Fed has made similar comments. Alot of the blame seems to be resting at the feet of the Russian-Ukraine war.

Meanwhile, Larry Summers has offered his 2c, stating that it will be impossible to control inflation without inducing a recession. Some commentators believe recession is already apparent (in France), whilst other economic data points to decreased discretionary spending (German retail spending down) thanks to increases in the cost of energy.

Has anyone changed their strategy so far?

what the West NEEDS is a BIG war , so everyone in fixated on it while the national treasury is looted ( and the winners will rush in and loot the vanquished when the dust settles )

now the problem is .. China is TOO big ( and has them by the supply lines ) while Russia is just the Goldilocks size BUT has a literal forest of nuclear weapons ( rigged to automatically launch as a nuclear counter-measure )

Sooo the survivors of a nuclear war ( if any ) are more likely to live in the Southern Hemisphere , and they really didn't NEED a big war to get them out of debt ( well most of them ) any way

Sooo how do you factor in a conceivable worst case scenario
gold and silver in lead lined containers perhaps because you can bet the internet will be down for weeks

 

[Captain_Chaza]

Recession ?

The only recession I can remember is a Recession I didn't even feel

Even the last 2 Recessions felt the same to me

"Much to do about Nothing"
I say!

They all passed over and I did not even know that they had passed overhead

I would appreciate if somebody here will notify me when we hit the next recession
I would love to know what it feels like

I seriously think I am immune to recession

Trust me!

Every time I ever heard of Recession is when it had already Passed overheard
IE: This is The Perfect Buy Signal IMHO

 

[divs4ever]

Recession ?

The only recession I can remember is a Recession I didn't even feel

Even the last 2 Recessions felt the same to me

"Much to do about Nothing"
I say!

They all passed over and I did not even know that they had passed overhead

I would appreciate if somebody here will notify me when we hit the next recession
I would love to know what it feels like

I seriously think I am immune to recession

Trust me!

Every time I ever heard of Recession is when it had already Passed overheard
IE: This is The Perfect Buy Signal IMHOView attachment 142517

yes recessions are normally declared in hindsight ( and fudged figures ) ( especially if they are happening around election time )

i suspect some 'recessions' are actually mild depressions in comparison to The Great Depression ,

unusual this time was the RBA rate rise DURING a Federal Election campaign , which hints something more desperate is happening in the undercurrents