Gyroscopic Investing

Irrational fear that tomorrow's fed announcement will have a significant negative impact on the PP and the equity markets, in general. Not sure why long-term rates have been rising over the last few days, but I suspect LTT's to rise tomorrow while SPY and GLD tumble. I hope I'm wrong...been enjoying the ride as of late. I'll reflect on this post after the FED meeting unfolds tomorrow.

I don't follow Fed actions at all and I still make money each year with the portfolio. There is no way to predict what the markets will do with the news. People try to predict this stuff all the time and nobody gets it right better than chance. I wish I could find the study, but someone did look at market/economist predictions compared to what the Fed actually did and it is no better than chance on whether it was a good or bad call.

I own four assets that I am pretty sure someone will want to buy no matter what happens tomorrow. I always have something someone wants in the portfolio. The portfolio may dip, but usually it recovers in time.

buddtholomew wrote: I suspect LTT's to rise tomorrow while SPY and GLD tumble.

Isn't that how the PP is supposed to work?

I didn't know the Fed was going to make an announcement tomorrow.

In recent years, the Fed has been great for the PP.  What makes you think that is going to stop now?

AdamA wrote:

buddtholomew wrote: I suspect LTT's to rise tomorrow while SPY and GLD tumble.

Isn't that how the PP is supposed to work?

Yes, but the magnitude of the losses will outweigh the gain. Please don't get me wrong, I do not profess to know how tomorrow's announcement will impact the portfolio. My concern is purely emotionally driven and hopefully sheds some light on what other investors may be thinking as well. On the other hand, I may just be a weirdo...

Let us post here what we think will happen. Should be fun. I predict nothing of consequence to total portfolio value.

craigr wrote: Let us post here what we think will happen. Should be fun. I predict nothing of consequence to total portfolio value.

I predict that Bernanke will say that the Fed is ready to take whatever actions are needed to help promote full employment and economic growth.

As far as a QE-like program, I predict that he will be vague about anything the Fed might be planning to do, but he will hint that a broad spectrum of asset purchases may be undertaken, of a "significant" size large enough to have a "meaningful" impact on the economy.

Gold will jump, stocks will also go up, and LT bonds will be flat.  The dollar will drop. 

The PP will purr like a cat daydreaming of a bowl of mouse soup with catnip sprinkled on top.

Big day for gold.  1.75% up. 

Treasuries down .5%

Stocks up .5%

Ben will not disappoint.  I predict stocks rise 1.5%, gold up 2%, and LTT"s down half a percent.

OK I cheated.

nothing big will happen causing small ups and downs in the market, the Bernanke will keep doing more of the same but they will package it differently and call it by a different name.. disappointing results will be blamed on outside factors and any positive outcomes will be credited to it, no matter how far removed they are from their actions..

LOL, have you seen this?

http://www.businessinsider.com/bernanke ... orm-2012-9

AdamA wrote: Big day for gold.  1.75% up. 

Treasuries down .5%

Stocks up .5%

It looks like Adam called it pretty well.

MediumTex wrote:

AdamA wrote: Big day for gold.  1.75% up. 

Treasuries down .5%

Stocks up .5%

It looks like Adam called it pretty well.

I think I deserve partial credit:

"I predict nothing of consequence to total portfolio value."

Open ended QE...not sure there's anything better for a portfolio containing gold.

Pretty nice discount on LTTs today. I think that's where my monthly contribution will go.

I love the feeling of calm I have now when there's major market news yet I have zero worry about my investments.

iwealth wrote: Open ended QE...not sure there's anything better for a portfolio containing gold.

And zero percent interest through mid-2015.  Retirees get to enjoy three more years of having their nest eggs hollowed out by inflation with negative real interest rates.  I was reading a good book recently that told me how important real returns were.  :)  Looks like we've got three more years of "safe" cash instruments not being quite so "safe".

Seems like the total is $85 billion printed a month, with $40 billion of that to purchase mortgage-backed securities again rather than Treasury securities.  Wow.  The MBS thing should have both Austrian economists and MMR folks united in discomfort.  :)

Good call, Adam -- gold up a little over 2.5% since pre-announcement.

Lone Wolf wrote:

iwealth wrote: Open ended QE...not sure there's anything better for a portfolio containing gold.

And zero percent interest through mid-2015.  Retirees get to enjoy three more years of having their nest eggs hollowed out by inflation with negative real interest rates.  I was reading a good book recently that told me how important real returns were.  :)  Looks like we've got three more years of "safe" cash instruments not being quite so "safe".

See, all the retirees need to do is go back in time and load up on gold! 

Lone Wolf wrote:

iwealth wrote: Open ended QE...not sure there's anything better for a portfolio containing gold.

And zero percent interest through mid-2015.  Retirees get to enjoy three more years of having their nest eggs hollowed out by inflation with negative real interest rates.  I was reading a good book recently that told me how important real returns were.  :)  Looks like we've got three more years of "safe" cash instruments not being quite so "safe".

Unless the retiree holds a PP.  Retirees should not hold all of their funds in cash or CD's but in a diversified portfolio such as the PP.

I am newly retired and very thankful that I found the PP a couple of years ago!

MediumTex wrote: Gold will jump, stocks will also go up, and LT bonds will be flat.  The dollar will drop. 

The PP will purr like a cat daydreaming of a bowl of mouse soup with catnip sprinkled on top.

Bonds are coming back and may close flat.

My prediction is looking good.

I don't have a fancy daily portfolio tracking graphic maker. I think TDAmeritrade has one? If anyone can post the daily close results of the four assets in a graphic form that would be appreciated.

My main PP, including cash, which is overweight LTTs at the moment, so today's results are a bit depressed from what they'd be with a "neutral" PP:



This is my HSA PP, which is pretty close to neutral, but at the moment, the cash is sitting in the HSA checking account, so it's not included in this number.

Thanks. So we had a profit today which is also what Morningstar is showing me. It's a perfect example of why I ignore market commentators on what the markets will or won't do in relation to the Fed (or anything).