Contributing - Rebalancing Timing?

[4x4]

I realize the PP philosophy purports the difficulties, or maybe impossibilities would be more accurate, of market timing. 

However for a new PP, considering yearly trends, such as http://seasonalcharts.com and tax season selling/ira contributions, what time of year/season/month would be best in the accumulation phase to contribute (rebalance?) 

(This is assuming the portfolio is too new to hit rebalance bands)

For example, maybe purchasing stocks in November, a traditionally bullish turning point.  Gold at a similar historically strong / take off month for prices, perhaps June or July, etc...

[ochotona]

I am a new investor. I set up text msg alerts when my four PP ETFs hit 52 week highs or lows, to prompt me to look.

[barrett]

For example, maybe purchasing stocks in November, a traditionally bullish turning point.  Gold at a similar historically strong / take off month for prices, perhaps June or July, etc...

Well, I just don't believe that these "traditionally bullish turning points" actually exist. In recent history, February 1, 2009 was the absolutely best time to add to stocks. Then there were buying opportunities again in May-August of 2010, August of 2011, October of 2014 (for about two seconds before the market recovered). Not to mention that adding to a stock position just about anytime in the 1980s to mid 1990s was a good thing. Ditto for gold in the 2000s. People who think the market highs and lows are reliably linked to the calendar don't really understand just how totally unpredictable markets are.

Anyway, I say contribute when it makes sense for you. As a self-employed worker, I generally do so around this time of year because it's when I am trying to stash as much as I can into retirement accounts. I have always tried to get money invested as soon as possible just so it has longer to work.

Your own situation will ultimately determine what is best for you, but make decisions based on buying laggers, rebalancing bands, taxes, etc., and not on when the chartists say is propitious. Just my 2 cents worth.

[MachineGhost]

I'm with barrett on this one.  If you look at the seasonals and President Cycle, its only about a 70%-75% probability of happening at the same time every year.  The problem is what is your plan for the year when it does not occur as it "should"?  Being out of the market is costly and it only makes sense to be out only to avoid greater losses than by being in.

Technical analysis that actually works for investing is very long-term.  You will have very relatively few opportunities for a buy or sell point, i.e. gold has been dead for going on 4 years now.  What are you going to do in the meantime?

[ochotona]

As a new PP investor, gold is a tough one to wrap my head around. Since it's 100% sentiment driven, not earnings or interest driven, my thought is to let the gold rebalance band be very wide, not 15/35, but let it get down to 10/40, who knows, let it down to 5/45 if the knife is falling, then rebalance it. It's emotionally tough.

.... gold has been dead for going on 4 years now.  What are you going to do in the meantime?

[EdwardjK]

You will have very relatively few opportunities for a buy or sell point, i.e. gold has been dead for going on 4 years now.  What are you going to do in the meantime?

If gold is "dead" and cash yielding near zero, we are left with equities and bonds.  That a crazy thought.

[ochotona]

No kidding! Seriously worrisome times.

If gold is "dead" and cash yielding near zero, we are left with equities and bonds.  That a crazy thought.

[sophie]

Market timing purchases will work about as well as including student loans in the bond allocation (sorry couldn't resist).

If the market performed that predictably, people with much more time to devote to such things than you and I have will have figured it out by now and proceeded to make lots of money.  Eventually enough people would be doing this that the effect will be arbitraged away.

Thus:
- any consistent timing effect will be short-lived.
- anyone finding a genuine slice of predictable market behavior will be too busy capitalizing on it to blog about it or otherwise help you make money off the idea.

I've told this story before, but worth repeating:  my uncle was a Wall Street trader who spent every waking moment thinking, talking, and breathing the markets.  Despite being reasonably smart and knowledgeable, he lost almost all his savings on bad bets.  He'd have been better off buying index funds and spending the rest of his time on the beach.

Your questions are making me think the PP is not for you - not yet anyway.  Some of us had to get badly burned a time or two before arriving at the PP; other wiser heads didn't need that kick in the pants.  But all of us had to learn and truly understand and internalize the philosophy.  If you're at that stage now that's perfectly fine.  It's always better not to invest in something that you don't completely believe in (or understand).

[4x4]

@Sophie 

I've already had some PP holdings for some time, just added another account.  In the set up phase, it was tempting to rotate purchases, i.e. make a purchase of one of the four assets that seemed to be down, then one of the remaining three next month, etc.  I was lucky to be 100% stocks 2008, so the temptation of market timing, just a little, is tempting   I realize that rarely is the future direction so obvious as it was in 2008.  And this is one of the main reasons to hold a PP.

To be honest, I was really tempted to just sit in cash for a bit instead of starting a second PP, this was after I got out of energy plays (before oil tanked), gold is still dropping (may have found support), and well bonds... no comment lol, but anyways, I'm already in PP's


Mahalo for everyone's responses

[Mike59]

For example, maybe purchasing stocks in November, a traditionally bullish turning point.  Gold at a similar historically strong / take off month for prices, perhaps June or July, etc...

I was a terrible market timer and lost a lot of money trying in the past years (and in my VP as well).

I've automated my monthly purchases  as paycheques come in:
contribute to cash, then bring the cash down to 25% by sending the excess to whatever funds have the lowest percentage at the time of contribution (ideally I'd pick only one sector if it's as low as 22 or 23%). I also wait until the last trading day of each month to buy (at 3:45 or so) to avoid market noise and drama. 

For what it's worth, I've made more money within the last year with the PP than I have in 5 years of investing with other techniques. I also gained back all the losses and so far all of my sectors are in green, probably because I've locked away my emotions/brain and thrown away the key.