Gyroscopic Investing

It's been 8 years of almost uninterrupted U.S. bond and stock gains, which is a long time. It's now September, the worst month of the year for stocks historically. Bond yields world wide seem to be rising. And possibly most importantly, its the end of 8 years in office by a President. The market crashed in 2000 as Bill Clinton was leaving. It crashed in 2008 as Bush was leaving. Now the 8 years of Obama is about to end. Will we get the same result? Markets are down across the board today as volume has picked up so this may be skewing my view of things. Help me, Budd!

Must be coming since I decided Wed and Thurs this week was a good time for me to fully be done rebalancing to a more golden butterfly portfolio.

And everything in the portfolio is getting hammered!

Reub, hang in there my man.
The only activity I would consider is rebalancing to target allocations.
We will experience a crash at some point, but I feel like the PP airbags will do just fine.
I could be wrong, but I'm not willing to guess by getting out and then trying to get back in.

Reub wrote:It's been 8 years of almost uninterrupted U.S. bond and stock gains, which is a long time. It's now September, the worst month of the year for stocks historically. Bond yields world wide seem to be rising. And possibly most importantly, its the end of 8 years in office by a President. The market crashed in 2000 as Bill Clinton was leaving. It crashed in 2008 as Bush was leaving. Now the 8 years of Obama is about to end. Will we get the same result? Markets are down across the board today as volume has picked up so this may be skewing my view of things. Help me, Budd!

Eh, we're just going through the seasonally worst 2-3 weeks of the year. Something about the equinox, S.A.D. or shift from summer to autumn. Silly humans. So get your ammo ready. If we get a double dip out of it, look for Brinker to even make another call!

Speculation: This might be the last rally left in Treasuries before the SHTF.

Cortopassi wrote:Must be coming since I decided Wed and Thurs this week was a good time for me to fully be done rebalancing to a more golden butterfly portfolio.

And everything in the portfolio is getting hammered!

Everything except inverse funds are declining today.
If you can rebalance back to the GB allocation then you know it's the portfolio for you.
Your test just came sooner than later.

MachineGhost wrote:

Reub wrote:It's been 8 years of almost uninterrupted U.S. bond and stock gains, which is a long time. It's now September, the worst month of the year for stocks historically. Bond yields world wide seem to be rising. And possibly most importantly, its the end of 8 years in office by a President. The market crashed in 2000 as Bill Clinton was leaving. It crashed in 2008 as Bush was leaving. Now the 8 years of Obama is about to end. Will we get the same result? Markets are down across the board today as volume has picked up so this may be skewing my view of things. Help me, Budd!

Eh, we're just going through the seasonally worst 2-3 weeks of the year. Something about the equinox, S.A.D. or shift from summer to autumn. Silly humans. So get your ammo ready. If we get a double dip out of it, look for Brinker to even make another call!

Speculation: This might be the last rally left in Treasuries before the SHTF.

Do you mean before treasury prices fall precipitously? I wouldn't call today a treasury rally....except for their yields.

Rally=rising interest rates.

I assumed flight to safety but today definitely looks like a Tight Money scare.

We can expect more of the below as yields ratchet higher and higher over the next 40 years?

MachineGhost wrote:Speculation: This might be the last rally left in Treasuries before the SHTF.

It would be great if nothing happened Yellen did nothing at least until December, and long bonds continued to do well. If TLT goes back to 140, I'll be tempted to unload some more bonds.

MachineGhost wrote:We can expect more of the below as yields ratchet higher and higher over the next 40 years?

The way I read the relationship is if equities decline, TLO increases (yields decline).
Friday shows US equities -2.5, TLO -1.5
40 years hence shows US equities down -1.5 and TLO positive 2.5.

There have been articles stating that stocks and bonds move together way more than they used to.

You know what PP investing has done for me? Convinced me yet again that I suck at market timing and whenever I have thoughts I could do better, very quickly the market moves 180 different than I expected.

Thursday, I rebalanced everything to match what I am most happy with. Call it the Corto portfolio. A little more precious metals (30%) and stocks (35%) basically, taken from the cash portion.

Friday, spent lamenting how if I only waiting one more day I could have gotten in at such better prices

Monday, if you are one who could have foretold this immediate rebound, kudos to you. I expected more downward movement.

These three days have shown me (again) it is useless to try to time anything. If you feel you need to rebalance, just do it.

Don't sweat it, Corto. In a few years (or less), it won't seem like much.

Cortopassi wrote: Thursday, I rebalanced everything to match what I am most happy with. Call it the Corto portfolio. A little more precious metals (30%) and stocks (35%) basically, taken from the cash portion.

This is common. Many people see deflation as almost impossible but inflation as assured, and 25% of the portfolio in cash as nothing but opportunity cost. I do this as well. 3% cash, the rest is split 3 ways.

A second crash after Monday's recovery. Stocks, bonds and gold all down! Is this the 8th year big one again?

Reub wrote:A second crash after Monday's recovery. Stocks, bonds and gold all down! Is this the 8th year big one again?

Can we even call this a crash, though?
Stocks are way higher than I dreamed they would be this year. They've got to come down, Reub.

What is the 8th year big one?

What artificially goes up doesn't always come down gently.

So you are thinking the likely scenario: stocks and bonds both get pummeled, and the effort to keep gold down continues to also be successful, so PP goes from being a great place to be to hell?

And my 14+% gain from a week ago will be in the 10s after a couple mutual funds are priced tonight.

Not like I have anyplace better to be invested in.

My gut feeling is to buy this pullback as it resembles every other pullback prior to an interest rate decision.
That concerns me since I am always incorrect so have decided to do nothing at this time.
Look at the positive, we are up 10%+ YTD.

When the 3 non cash assets drop I see the cash portion carrying or greatly mitigating the drop. In relation to the others cash is up so to speak.

wolfgango wrote:When the 3 non cash assets drop I see the cash portion carrying or greatly mitigating the drop. In relation to the others cash is up so to speak.

This brings up an interesting point: how can we know what the value of cash is doing?

IDrinkBloodLOL wrote:This brings up an interesting point: how can we know what the value of cash is doing?

It's all subjective, right? I suppose you could look at DXY in relation to the times you add cash to your account and do a delta to see if it is "up" or "down" but that doesn't change the number of dollars.

Or compare to a basket of items you normally buy during the year, food, household items, dining, etc?

Too much trouble. I wish it could just sit in a 5% money market!

A crash? Give me a break you Chicken Littles.

A crash is when you lose almost 30% in a day aka October 19 ,1987.

That's probably gonna happen if Trump wins the election.