[2BNTV]

Originally Posted by 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.

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]

Originally Posted by 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.

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]

Originally Posted by 2BNTV

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]

Originally Posted by Cantwaittoarrive

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.

[buzzy]

Originally Posted by l2ridehd

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!!

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]

Originally Posted by 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.

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]

Originally Posted by 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.

Reasonable call.

[michaelkir]

Originally Posted by 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.

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

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

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]

Originally Posted by 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

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

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.