Gyroscopic Investing

Reub wrote: Thanks for that! My Hedgeable account has also gone to mostly bonds and cash.

Excellent! So does Hedgeable have a nice tax-loss harvesting mechanism in your view? Does it ever hold back from selling if selling would create a tax disaster? Is it "smart" about taxes the way a skilled investment adviser would be... like maybe we should speed-up or wait a few days before pulling the trigger on this sale, in order to harvest losses this tax year, or create a LT cap gain vs a ST cap gain?

So are we in or near a recession? Or is all of this red ink just another speed bump as stocks get ready to resume their upward trajectory of the preceding six years sans 2015.

Ad Orientem wrote: So are we in or near a recession? Or is all of this red ink just another speed bump as stocks get ready to resume their upward trajectory of the preceding six years sans 2015.

It's hard to imagine being on the edge of a recession with oil prices this low.

It's typically oil price spikes that trigger recessions, although you would never know it to hear all of the other reasons that politicians and economists come up with.

I keep thinking how much more money everyone else will have....

... yeah, definitely losers too, but.....

MediumTex wrote:

Ad Orientem wrote: So are we in or near a recession? Or is all of this red ink just another speed bump as stocks get ready to resume their upward trajectory of the preceding six years sans 2015.

It's hard to imagine being on the edge of a recession with oil prices this low.

It's typically oil price spikes that trigger recessions, although you would never know it to hear all of the other reasons that politicians and economists come up with.

It's faulty logic... if a little is good, more must be better.

Yes, it's good for the USA on balance if the energy goes down somewhat, but so much economic activity is tied to oil and gas extraction, and the ripple effect from that sector, that a crash like what we have has more ill effects than good.

The economic benefit as a function of oil price is an upward-concave parabola. Too high is bad. Too low is bad. We are far from the sweet-spot. Oil industry woes are causing industrial layoffs in the Midwest - in steel, heavy equipment.

If eggs went to $0 one week, you'd better enjoy them, because next week... no more eggs.

Man, January's been brutal for stock-heavy portfolios so far. Anyone buying stocks yet?

I moved 1% into small cap and 1% into emrging mkts last week (on the way to 5-10% of each eventually).  Oops, a bit early, but that's why I didn't do it all at once.

Pointedstick wrote: Man, January's been brutal for stock-heavy portfolios so far. Anyone buying stocks yet?

Not yet for me. I let my stocks ride a bit high in 2015. Haven't checked in ages but my percentages are probably not too far from 4X25. It seems with the PP you kind of feel crappy about it for months and then there comes a "Thank God" moment every few months. Well, it's just a phrase. Not trying to figure out religion here.

I am not a buyer now

I just this morning "rebalanced" by plowing a big contribution into bonds and gold.  Stocks were up to 32% so I thought I might as well.  Happily, a small slice of it went to stocks and since it's a mutual fund, it'll buy at close of business today.  Grin.

I am one happy camper today!  At least as long as I don't peek at my 50/50 Boglehead retirement account.

sophie wrote: I just this morning "rebalanced" by plowing a big contribution into bonds and gold.  Stocks were up to 32% so I thought I might as well.  Happily, a small slice of it went to stocks and since it's a mutual fund, it'll buy at close of business today.  Grin.

I am one happy camper today!  At least as long as I don't peek at my 50/50 Boglehead retirement account.

Wow, even Sophie doesn't follow the Sophie Contribution Method

It was an unusually big contribution to a retirement account, I was close to crossing a rebalancing band, and I needed to rearrange some assets to put more cash into taxable accounts.  This was an easy way to accomplish all of the above.  So sue me.

Just couldn't help chortling a bit over how well it worked out!

sophie wrote: It was an unusually big contribution to a retirement account, I was close to crossing a rebalancing band, and I needed to rearrange some assets to put more cash into taxable accounts.  This was an easy way to accomplish all of the above.  So sue me.

Just couldn't help chortling a bit over how well it worked out!

Did it make you feel like this?

MediumTex wrote:

sophie wrote: It was an unusually big contribution to a retirement account, I was close to crossing a rebalancing band, and I needed to rearrange some assets to put more cash into taxable accounts.  This was an easy way to accomplish all of the above.  So sue me.

Just couldn't help chortling a bit over how well it worked out!

Did it make you feel like this?

that's SOME powerful waterproof makeup there.

Ha!!!

Apart from the makeup and swimming underwater with eyes open.  I never could get the hang of either one of those.

It was just one of those amazing PP experiences:  at the end of December I'd crossed a rebalance band, the big contribution registered at Fidelity the day before and I decided to use it to rebalance even though the band was un-crossed, which meant using the entire slug of cash to buy bonds & gold which was appropriately scary and required significant nose-holding.  Plus all the echoes of Mathjak, Ochotona, Budd etc ringing in my ears.  I expect others have been having the same experience (??).

And then the VERY NEXT DAY look what happened.

I have no idea if this is a temporary blip or if the doomsayers are right about a 2016 cataclysm, but it's so nice not to have to worry about it either way.

sophie wrote: I have no idea if this is a temporary blip or if the doomsayers are right about a 2016 cataclysm, but it's so nice not to have to worry about it either way.

Even for the PP, it's not easy staying green.

[img width=500]http://www.brianlowephotography.com/dat ... t_real.jpg[/img]

Stocks are very, very overbought on a short term basis. There is lots of downward pressure. This pop was a short-covering rally. Oil, too.

Pointedstick wrote: Man, January's been brutal for stock-heavy portfolios so far. Anyone buying stocks yet?

As soon as I'm done paying taxes (estimated payments) and sharing with the Mrs.
Actually, my main focus is to try to get her to buy some stocks instead of hoarding cash.

Stocks are really, really overbought at present. We could be looking at a repeat of the Oct-Nov 2015 rally, which ended badly. I would shy away from buying stocks at this time. I think it may become more clear in a month or two if this is a lasting rally or if there is going to be another cliff dive.

Ocho,

Fair to say, at least for the past 2 months, that anyone following the 10 month MA Ivy signals will have lost out on these gains, and likely buy in higher at the end of March?

A whipsaw is a real possibility, unfortunately, and more likely when using 10 month MA as opposed to 12 month total return.

The blackout period for stock buybacks is beginning next week. Companies buying back shares of their own stock (to increase earnings per share) have been a major prop keeping the market up. What will happen over the next six weeks as this prop comes off?

http://www.bloomberg.com/news/articles/ ... e-earnings

I followed Sophie's lead and invested 1/3 in stocks, gold and treasuries yesterday morning.
Either someone is playing a cruel joke or these assets are really green today.
I had just reached the point of analysis paralysis and forced myself not to stay in cash.
We'll see how it turns out, but 40% cash is too much for even me.

buddtholomew wrote: I followed Sophie's lead and invested 1/3 in stocks, gold and treasuries yesterday morning.
Either someone is playing a cruel joke or these assets are really green today.
I had just reached the point of analysis paralysis and forced myself not to stay in cash.
We'll see how it turns out, but 40% cash is too much for even me.

I'm still roughly 60% in cash.  Its frustrating but I just don't see enough investment opportunities yet.  So this year, I've decided to freeze portfolio contributions and just DCA in from existing capital over 108 weeks since I expect global recession and/or political crisis throughout the rest of this year and next.  At least in those assets that are All Systems Go right now: gold and T-Bonds (stocks are looking to flip back to bullish at end of this month).  T-Bonds is an interesting conundrum because the yields are so low it doesn't justify more than a 5-year maturity exposure and the yields on CD beats it.  I don't like the idea of investing in long-duration T-Bonds as a stand-alone without justification that it is the best to be in, not second, third or fourth.  Just too risky.

I bet most didn't know it took only about 2.5 years during the Great Depression to get back to breakeven after 1929-1933.  The Nifty Fifty 1973-1974 bear that killed first responder's pensions (and Polaroid!) was the real killer.  It took 12 years just to get back to breakeven.  The PP would have saved your ass, literally.

And I bet most don't realize the PP is really just a 50%/50% portfolio, hence why the 4% SWR rule works.  mathjak could have learned something if he had stuck around.

MG,

And how many know of the bull market of 1932-1937?

How's that vacation, by the way?  Two years of Business Week got read pretty quickly!

Cheers.