Time to get out of stocks?

[Heartnsoul]

what do you think?? time to get out of stock market?? March 1st is quickly approaching.

[michaelkir]

Interesting concept, but if you didn't harvest your gains last year when Cap Gains were assured to be taxed at the lower rate why would you consider triggering gains now just two months later when the market is headed in the right direction?? Mr Obama is looking at the cap gain rate and wants it to increase this could cost you a few more %. What is magic about March 1???

[aln]

I don't see anything in a 5 year history to warrant getting 'out' of stocks.

[coralway]

The DOW is up about 63% under this administration.

[Roaddog53]

I don't see anything in a 5 year history to warrant getting 'out' of stocks.

Maybe you are not looking at it right. Every March timeframe for the past few years with exception of the 2008 crash shows a drop in stock until about August, than a rise after. Some even say September drop. Nah. Go ahead and stay in it. Than talk to me after this summer.

[rjm1cc]

Before you get out you have to have a plan that will identify the time to get back in if you are a long term investor.

[Roaddog53]

Before you get out you have to have a plan that will identify the time to get back in if you are a long term investor.

September

[Cantwaittoarrive]

I think if cash keeps flowing into the market from bonds and the retail investor starts getting back in the market in ernest, it's time to get out. There is nothing wrong with siting in cash for a while if it's part of your overall strategy. The bottom line for me is you have to have a plan. Work your plan and plan your work. Don't forget you can hedge your investment with options and other instruments.

[2BNTV]

Count me as someone who thinks you can't time the market in terms of you get out when their might be a dip in the overall value and get back in when it's at it's lowest. Maybe in 2008 when things weren't going so good at the market took a severe hit but I don't see that happening.

Except for the crash in 2008, some people who got out of the market has missed some of the big gains. The market has been doing exceedingly well. One person on Yahoo predicted a 50% drop in the market but I seriously doubt that's going to happen.

I am confused on why you think March 1st is a special event? Please enlighten me.

[justjim]

In previous times I traded on a regular basis---now just buy good dividend paying stocks and hang in there. Trading often---nope---retired!

[batman911]

Think of the long term. March may be a good time to buy if the market dips. You will never get ahead running with the herd.

[l2ridehd]

No one can beat the market using market timing. Most of those who try lose in the end. You need an investment strategy that lays out what you will do when and be very disciplined with execution.

I use an IPS (investment policy statement) that I wrote several years ago and still follow today. It lays out where all investments are located along with account numbers and passwords, how much of an emergency fund to maintain, How to tax manage, how much risk to allow, what my AA (asset allocation) will be, adjusted for age, what my international and emerging market % of total stock investments should be, when I should re-balance, what duration of bond investments I will use, targets for when to sell and when to buy, and what investment vehicles to use. As long as I follow it, it works. Having this you never have to ask is it a good time to sell or other questions that will cause you to make mistakes. A couple examples.

If the S&P falls by 10% (last 60 day high) I will move 25% of stocks to cash. Falls 20% I will move 50% to cash. I will buy again when it rises by 10% from last 60 day low and again when it rises by 20% from the low.

If stocks rise and my asset allocation shifts by 5%, I sell stocks and buy bonds. Same if stocks fall and I am off 5% in the opposite direction, I will sell bonds and buy stocks to get back to balance with my AA. This always forces you to buy low and sell high.

[Heartnsoul]

No budget has been passed yet and "Fiscal cliff" right up ahead I'm out Think I timed it perfectly

[buzzy]

>>If the S&P falls by 10% (last 60 day high) I will move 25% of stocks to cash. Falls 20% I will move 50% to cash. I will buy again when it rises by 10% from last 60 day low and again when it rises by 20% from the low. <<

This is a form of market timing. These rules are an algorithm for what is referred to as mechanical timing.

[Down Sized]

Europe is everyone's concern at this time. They have more debt than we do with no chance of ever paying it down. Both countries just kicking the can down the road. This is what will be the next market killer.

[2BNTV]

Europe is everyone's concern at this time. They have more debt than we do with no chance of ever paying it down. Both countries just kicking the can down the road. This is what will be the next market killer.

I don't understand how some country's small economies have such an effect on our very large economy? I guess that's why I use a financial advisor.

I agree what goes on in other parts of the world sometimes affect out market values adversely.

[l2ridehd]

>>If the S&P falls by 10% (last 60 day high) I will move 25% of stocks to cash. Falls 20% I will move 50% to cash. I will buy again when it rises by 10% from last 60 day low and again when it rises by 20% from the low. <<

This is a form of market timing. These rules are an algorithm for what is referred to as mechanical timing.

I agree it is a mechanical timing but rarely executed. Think 2008. I hit the 10% once in 2011, but it happened fast and recovered above it before I sold. I put this in place in about 2002. So far 2008 is the only time I had to implement it. Did both in 2008, the 25% and 50% move from equities to cash. Kept 50% of the equities in place through it all. However also bought back in based on the 10% and 20% rise so was totally recovered by the end of 2009 where most people it took until mid 2012. It works only as a safe guard against huge negative swings in the market. Look at it as a stop loss order on stocks that I self manage using index mutual funds. It is a small part of a total investment strategy where I will sustain only a 15% portfolio loss of income with up to a 50% market decline. I also have a pre-defined bond strategy based on interest rates, but a little harder to explain.

[Cantwaittoarrive]

I don't understand how some country's small economies have such an effect on our very large economy? I guess that's why I use a financial advisor.

I agree what goes on in other parts of the world sometimes affect out market values adversely.

There are many reasons, but one that should be fairly easy to understand is the failure of a smaller economy in Europe effects the banking system in many different ways and would most likely lead to the failure of some banks which would lead to the failure of more banks which continues to snowball until you have a meltdown. Think of the old weak link in a chain

[2BNTV]

There are many reasons, but one that should be fairly easy to understand is the failure of a smaller economy in Europe effects the banking system in many different ways and would most likely lead to the failure of some banks which would lead to the failure of more banks which continues to snowball until you have a meltdown. Think of the old weak link in a chain

Thank you. :smiley:

[buzzy]

I agree it is a mechanical timing but rarely executed. Think 2008. I hit the 10% once in 2011, but it happened fast and recovered above it before I sold. I put this in place in about 2002. So far 2008 is the only time I had to implement it. Did both in 2008, the 25% and 50% move from equities to cash. Kept 50% of the equities in place through it all. However also bought back in based on the 10% and 20% rise so was totally recovered by the end of 2009 where most people it took until mid 2012. It works only as a safe guard against huge negative swings in the market. Look at it as a stop loss order on stocks that I self manage using index mutual funds. It is a small part of a total investment strategy where I will sustain only a 15% portfolio loss of income with up to a 50% market decline. I also have a pre-defined bond strategy based on interest rates, but a little harder to explain.

Makes sense, thanks

[JPC55]

Until someone tells me where to better invest - the market is still the best place, depending, of course, how long you want to ride it. Bottom line - diversify diversify!!

[mcgols]

No . Nobody can time the markets there will be ups and downs that is why on average in the long term investors should be able to achieve higher returns investing in GICs or bank deposits. My advice is if you are conservative go 30 to 40% good quality dividend stocks and the balance in short term (<5years) bonds. Don't be trying to time the market. Buy right and sit back.

[gustavo]

No . Nobody can time the markets there will be ups and downs that is why on average in the long term investors should be able to achieve higher returns investing in GICs or bank deposits. My advice is if you are conservative go 30 to 40% good quality dividend stocks and the balance in short term (<5years) bonds. Don't be trying to time the market. Buy right and sit back.

That's funny. GICs are fixed return insurance vehicles. The insurance company takes your money, gives you a fixed return, pays its employees from the returns on your money they made through market timing.

It's funny to hear people say no one can time the market and in the next breath say most timers can't beat an index.

Since the premise that "most" can't implies that some can, so then timers "can" beat the market.

The OP says no one can time the market and in the next breath lays out a timing scheme??????

Anyone who says you can't time the market, has retired to the "average" lounge.

If everyone makes the average, no one in that group has improved their standing.

[Heartnsoul]

Count me out!! The ONLY reason the stock market is doing well lately is the dollar is so devalued. Over 16 TRILLON IN DEBT and climbing does not have me confident.

[Villages PL]

My crystal ball says that the market will take a rest or have a correction and then resume with a summer rally. I would like to see 15,000 on the Dow by year end. The bottom line: Stocks are still a good buy.

[justjim]

My crystal ball says that the market will take a rest or have a correction and then resume with a summer rally. I would like to see 15,000 on the Dow by year end. The bottom line: Stocks are still a good buy.

:agree: Reasonable call.

[michaelkir]

My crystal ball says that the market will take a rest or have a correction and then resume with a summer rally. I would like to see 15,000 on the Dow by year end. The bottom line: Stocks are still a good buy.
Absolutely no disrespect intended but your post made me smile. You sound like my broker and attorney. The market "will take a rest or have a correction"
So:

"take a rest":...to me that means do nothing or stay put??????

" have a correction" to me that means the market could go up or down..which ever way the correction is needed????

So what am I to glean from this profound prediction..?????

Hope this made you smile too???

[buzzy]

Correction implies a rather sudden reversion to the mean, so it would be down from here.

[paperclip202]

There are 2 sides to every coin. That's what makes the market of buyers and sellers. Both of the below are very smart and have different reads on the market.

For the positive side to the coin, read James Paulsen at Wells Capital Mgt.

Wells Capital Management (http://www.wellscap.com/index.html)

For the negative side of the coin (very sober read), read John P. Hussman, Ph.D.

Hussman Funds - Weekly Market Comment: The Siren's Song of the Unfinished Half-Cycle - February 18, 2013 (http://www.hussmanfunds.com/wmc/wmc130218.htm)

Good luck to all. It is best to have a proper asset allocation for your risk tolerance rather than to "bet" on the short term direction of the market. Focus on asset classes, not just dividend paying stocks.

[Cantwaittoarrive]

There are 2 sides to every coin. That's what makes the market of buyers and sellers. Both of the below are very smart and have different reads on the market.

For the positive side to the coin, read James Paulsen at Wells Capital Mgt.

Wells Capital Management (http://www.wellscap.com/index.html)

For the negative side of the coin (very sober read), read John P. Hussman, Ph.D.

Hussman Funds - Weekly Market Comment: The Siren's Song of the Unfinished Half-Cycle - February 18, 2013 (http://www.hussmanfunds.com/wmc/wmc130218.htm)

Good luck to all. It is best to have a proper asset allocation for your risk tolerance rather than to "bet" on the short term direction of the market. Focus on asset classes, not just dividend paying stocks.

I use options and that way I can hedge my bet and cover my positions and win if the market goes up or if the market goes down. Since the value of the options change on a daily basis sometimes I will buy or sell and win daily on my hedges no matter what the overall market is doing.

[JoelJohnson]

Those that don't want to be in the market, already made their money and don't want to lose it (not a bad call), those of us that still need to get enough to retire are looking at making enough so we don't have to be in the market too.

[quirky3]

The sky is not falling. Just sayin'.

[JourneyOfLife]

We do not try to time the stock market. We use a strategic allocation and rebalance every year or so to the target allocation.

For the most part, we use low cost mutual funds

[rubicon]

The bigger concern for me are bonds based solely on the fact that the Fed by its QE is upsetting the balance . Interests rates will have to rise and when it does unless the Fed has a good plan it will play havoc with the bond market. In addition the Fed's QE attempts continue to deprive people of fixed income tools such as CD's, etc. The stock market leaps arr all water driven by the Fed's action because it is not based on factual and stable events.

[batman911]

The bigger concern for me are bonds based solely on the fact that the Fed by its QE is upsetting the balance . Interests rates will have to rise and when it does unless the Fed has a good plan it will play havoc with the bond market. In addition the Fed's QE attempts continue to deprive people of fixed income tools such as CD's, etc. The stock market leaps arr all water driven by the Fed's action because it is not based on factual and stable events.

You will be somewhat protected if you buy individual short or mid-term bonds and notes. You can just hold these until maturity and get all your capital back at maturity plus the interest specified on the bond/note. The danger is in bond mutual funds where the value of the investments drops when interest rates rise.

[rubicon]

You will be somewhat protected if you buy individual short or mid-term bonds and notes. You can just hold these until maturity and get all your capital back at maturity plus the interest specified on the bond/note. The danger is in bond mutual funds where the value of the investments drops when interest rates rise.

batman: thank you for your comments. WSJ also offers investors similar suggestions. There ws a time when one could build a ladder utilizing short term paper. I did with5 year TIPS to be used in conjunction with purchasing a needed vehicle when I retired some 7 years ago.

My RMD period is advancing and I intend to move around some funds to update my strategy.

Thanks again.

PS Bernake is still getting on my nerves.

[laddan]

Count me as someone who thinks you can't time the market in terms of you get out when their might be a dip in the overall value and get back in when it's at it's lowest. Maybe in 2008 when things weren't going so good at the market took a severe hit but I don't see that happening.

Except for the crash in 2008, some people who got out of the market has missed some of the big gains. The market has been doing exceedingly well. One person on Yahoo predicted a 50% drop in the market but I seriously doubt that's going to happen.

I am confused on why you think March 1st is a special event? Please enlighten me.

it is a well know statistical event that the stock market performs best in oct to april months and worse in may to oct. google it sell in may it is a real deal, but does not always have same impact every year, but is a real trend and can make you money, i plan to do it this year, but since i am out of market right now will get in when it dips and wait for the gain in oct to may. the fed has punished savers with 0 interest to pump the stock market and it has worked and will probable keep the markets up for a while longer.

[BarryRX]

Ah yes, the old "sell in May and go away". Every year I wish I had done it but I never do.

[jimmy D]

Sounds to me that you relly own mutuals funds and not indvidual stocks or you would be taking advantage of Obamacare. Health and medical Stocks, hedged with Golf and Dividend paying stock. Think Long Haul with stocks, Mutual funds you can trade within. So do you own Stocks or Mutual funds

[OnTrack]

The DOW is up about 63% under this administration.

Actually, it's better than that.

Poke Here (http://www.foxbusiness.com/investing/2013/01/23/how-does-wall-street-rally-under-obama-stack-up-in-history/)

Bouncing back from the Great Recession, the Dow Jones Industrial Average soared 71.7% from January 20, 2009, until Friday, the second best performance under a presidential first term since FDR in 1937, according to Dow Jones.

When Obama took the oath of office, the stock market was severely beaten down, trading at decade lows due to the economic chaos caused by the worst financial crisis since the Great Depression.

Stock prices initially tumbled on his watch, dropping another 18.6% to as low as 6469 in March 2009 as investors feared another depression.

And if you count the low seen a few months after he was sworn in (due to momentum) ....... it is up over 100%. :thumbup:

Having said that, I don't see stocks continuing the next 3-4 years.....the way they have in the last 4-5 years.



.