Gyroscopic Investing

We are about to enter year nine of one of the hottest bull markets in history. We are also entering the longest period on record where the S&P 500 has not had a correction of 5% or more. In other words the stock market has been moving in a more or less straight line for quite a while. I am not a fan of market timing (as most of us would agree) but this is the VP forum where some speculation is allowed. To be clear I'm not to saying that it's over or that we are heading for a crash. The market may well continue in its current trajectory for some time yet. But I do think that it's time to take stock (no pun intended) and remember that greed can blind people, especially if we have been making a lot of money. What started as a smallish VP consisting of VTI and VEU has done quite well and decisively outperformed my HBPP. But my gut says we are now on the back end of the bull market and I think it's time to (borrowing one of Jim Cramer's lines) "ring the cash register" and take the profit. Last Friday I sold out my VP and put the money into VWIAX. Again I am going with my gut here, but I'm no longer comfortable with an all stock VP.

Am I being too cautious?

Benjamin Graham recommended between 25-75% stocks, depending on how you think they're looking, which seems pretty smart. I sold some stocks at the end of the year to buy real estate, but if the stock market experienced a massive crash I'd feel alright putting it back in instead.

US stocks look overvalued based on the Buffet Indicator (149.6%) and the Shiller PE (34.28).

Currently at 54% stocks overall.

Is the stock market getting too hot?

I don't know, but I've got plenty of bonds in my vp and I am probably about 45% in stocks overall.

50% stocks overall here

25% here. Did a early (less than 35%) re balanced December of 2016 and 2017.

I don't think we're done with this melt up. I haven't had any muggles asking me about stocks at all. We have plenty of room for increases.

I'm at 40.2% in stocks currently.

Consider this alternative:

1. Sell 50% of your VP.
2. Move those gains to your PP and distribute 1/3 each to gold/cash/ LTTs. (I am assuming your stocks in your PP have moved up as well.)

-You can still play your VP bet on stocks, just not as aggressively.

-You will sleep better with a larger PP.

I've trimmed back a little in stocks and moved it to cash to make myself more comfortable. Currently at about 38% in stocks overall.

Currently at 15% thinking about going to 25%.

I think it would be helpful to share strategy signals that everyone here relies on in making their move.

The following graph of two ETF indexes from Vanguard: VWO and VTI for the last eight years. Tech analysts expect the long trend to go upward, possibly this year. If this takes place, then the emerging/developing markets will continue to lead the pack. This is just an opinion and does not call for action.

P.S.: The link to the image is https://ibb.co/d2Eb4R. Perhaps people can recommend a good place to store images to display on this forum.

I don’ understand that graph. VTI had a share price of about 50 in March-April of 2010. Now it’s at 144.
What is the graph measuring?

HappyMan wrote:Currently at 15% thinking about going to 25%.

I think it would be helpful to share strategy signals that everyone here relies on in making their move.

The following graph of two ETF indexes from Vanguard: VWO and VTI for the last eight years. Tech analysts expect the long trend to go upward, possibly this year. If this takes place, then the emerging/developing markets will continue to lead the pack. This is just an opinion and does not call for action.

P.S.: The link to the image is https://ibb.co/d2Eb4R. Perhaps people can recommend a good place to store images to display on this forum.

Tinypic

dualstow wrote:I don’ understand that graph. VTI had a share price of about 50 in March-April of 2010. Now it’s at 144.
What is the graph measuring?

I believe it's the price per share of VWO divided by the price per share of VTI to achieve a graph showing relative performance. As the number decreases, VTI is outperforming, and the opposite for VWO.

ahh, thank you.

ochotona wrote:
Tinypic

Thanks!

eufo wrote:

dualstow wrote:I don’ understand that graph. VTI had a share price of about 50 in March-April of 2010. Now it’s at 144.
What is the graph measuring?

I believe it's the price per share of VWO divided by the price per share of VTI to achieve a graph showing relative performance. As the number decreases, VTI is outperforming, and the opposite for VWO.

Well explained!

Suddenly I am feeling like a financial genius.

Ad Orientem wrote:Suddenly I am feeling like a financial genius.

Well, people called Harry Browne a genius b/c of what happened after his Coming Devaluation book. He humbly said that it could have happened many years after publication, but that the lucky timing made him look smart.

dualstow wrote:

Ad Orientem wrote:Suddenly I am feeling like a financial genius.

Well, people called Harry Browne a genius b/c of what happened after his Coming Devaluation book. He humbly said that it could have happened many years after publication, but that the lucky timing made him look smart.

Indeed. And this was luck. If I had a nickel for every foolish thing I've done with money (mostly before discovering the PP) I could stop buying lottery tickets. Oh wait...

Ad Orientem wrote:Suddenly I am feeling like a financial genius.

So, what do you think will happen next?

HappyMan wrote:

Ad Orientem wrote:Suddenly I am feeling like a financial genius.

So, what do you think will happen next?

I have a high degree of confidence that the stock market will either go up... or down.

Ad Orientem wrote:

HappyMan wrote:

Ad Orientem wrote:Suddenly I am feeling like a financial genius.

So, what do you think will happen next?

I have a high degree of confidence that the stock market will either go up... or down.

Why we are in the PP!

"It's Time To Be Alert!"

An article on zerohedge compares the current situation to that of 1929, when S&P saw a drawdown almost 50%.

https://www.zerohedge.com/news/2018-03- ... e-be-alert

Zero Hedge is a bit too fringy for my taste. But to each their own.

OK, so how many people switched to the Golden Butterfly in the past year?

I have a feeling that a very good time to do that is going to be coming up sometime in the near future.

sophie wrote:OK, so how many people switched to the Golden Butterfly in the past year?

I have a feeling that a very good time to do that is going to be coming up sometime in the near future.

Can you elaborate?
You expext SCV to decline in the near future?

Today I finally got around to completing a portfolio rebalance I've been needing to do for a while. It had become a bit stock-heavy over the last few years, and I admit it feels nice to get back on center. While stocks have certainly been on a tear for a while, now I can confidently return to one of my favorite activities -- ignoring the markets.