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Frequent Contributor

Re: What to do now

What NOT to do now is run for the hills and hide in cash.

Look at where we are now and where we might end up.   https://stockcharts.com/h-perf/ui?s=$SPX&compare=$COMPQ,$INDU,MDY,$TRAN&id=p78742986619

Nobody will catch the absolute bottom. But I will sell my accumulations now later to the 3-mo-momo investors and MA-breakout investors later. They should thank that there are those kind of folks around; otherwise, there won't be a playground for them to play in.

 

YBB
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Explorer ○

Re: What to do now

+1

What NOT to do now is run for the hills and hide in cash.  Nobody will catch the absolute bottom. But I will sell my accumulations now later to the 3-mo-momo investors and MA-breakout investors later. They should thank that there are those kind of folks around; otherwise, there won't be a playground for them to play in // YBB.

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Frequent Contributor

Re: What to do now


@jmrdnc wrote:

Suggestion, post buy, sells, and why on the Buy, Sell, Why thread, where they can remain visible to be checked, not buried in this thread.

Probably good investors on your "Special List." 


jmr...this is the trouble with keeping posting continuity to the thread topics.  Now we have had several posts that do not deal with "what to do now?"

It might surprise you that I founded and created the decade-running continuous thread titled Buys/Sells/Why you refer to.  I moderated it for years...then M* and I agreed not to have a moderated forum.  

I myself have stopped posting on that thread, because it got too pejorative and uncivil to some of us, often being criticized about what we are doing, and when.  So, there came a point where I embed within posts what I am doing.  Those who follow my posts thus get the info.  The new M* forum, with a moderator, has cut down on most of that stuff, but it gets discouraging to state what one is doing, without a lecture on buy-and-hold is the only way to invest.

I have chosen to join/team up with FD on this thread, providing what we do, and why.  He referred to me a couple times in his original post, and for that I am appreciative.  

I will keep posting what I do, and gladly answer any questions or clarifications on-topic.  Simply trying to help in these tough times.

And FD...behave yourself:-)  Don't get too interpersonal.

R48

 

.

 

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Follower ○○○

Re: What to do now

R48. Cabernet will surely help.  (but..I might save for killing virus first).  I appreciated you and FD posting on bond.  I am not quite understand the bond fund. I sell some today.  I also look into PSTIX.  Will have more questions tomorrow.

Discipline Discipline...

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Explorer ○

Re: What to do now

At Fidelity, it may not be a great idea to put your money in their money market funds. Rather, you should consider their treasury or govt money market funds instead. The former can go below a buck while the latter can't. You may lose 20 basis points or so, but at least you can sleep at night knowing you can't lose any of your money or have to wait for it in a liquidity crunch.

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Explorer ○

Re: What to do now

R-48 Thanks again for your input above. Your thoughts on the AGG or Total Bond funds in this environment?

 

DGC

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Explorer ○

Re: What to do now

Bill Ackman is an idiot.

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Participant ○○○

Re: What to do now

Well, the idiot "Bill Ackman" kept blabbering today that the world is going to end if we don't shut the country for a month! I am fairly positive that he must have a huge short position on the S&P futures or something else as he and everyone else is blowing this virus out of proportion. Sure, it will take weeks/months to control it but not at a level of panic that is around.

Time will tell, of course, but the panic is tremendous in the credit markets and the lunatic, Ackman, said that he withdrew large sums of money to keep it safe. Can you freakin' believe it? Are the banks going to run out of cash that these fear-mongers have to go to extremes to hoard cash?

Goodness gracious, even my bond OEFs are trading like stocks that people are selling in droves. Why is so much panic from the retailers?!?

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Explorer ○

Re: What to do now

Someone needs to do a cost benefit analysis to determine if the shutting down of the American economy and risking a 1930's type of depression is an acceptable outcome for the extreme measures that are being implemented. IMHO, it isn't.


@RainGater wrote:

Well, the idiot "Bill Ackman" kept blabbering today that the world is going to end if we don't shut the country for a month! I am fairly positive that he must have a huge short position on the S&P futures or something else as he and everyone else is blowing this virus out of proportion. Sure, it will take weeks/months to control it but not at a level of panic that is around.

Time will tell, of course, but the panic is tremendous in the credit markets and the lunatic, Ackman, said that he withdrew large sums of money to keep it safe. Can you freakin' believe it? Are the banks going to run out of cash that these fear-mongers have to go to extremes to hoard cash?

Goodness gracious, even my bond OEFs are trading like stocks that people are selling in droves. Why is so much panic from the retailers?!?


 

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Participant ○○○

Re: What to do now

@retiredat48 @FD1001 

R-48 recommends hunkering down at this point. I agree with this for my stock funds, but and not sure for bond funds. I still have sold none of my bond funds so far, PCI, PDI, IOFIX, PIMIX, JMUTX, JGIAX, VCFAX, and a little TLT. While they have helped compared to all stocks, they are dropping too. So, does hunker down at this point make sense for bond funds as well? I just hate selling anything in down times, but there is also maybe a case for dodging falling knives rather than catching. :-) BTW I do take some comfort in reinvested divs, but go back and forth with whether or not that is sound thinking.

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Frequent Contributor

Re: What to do now


@archer wrote:

@retiredat48 @FD1001 

R-48 recommends hunkering down at this point. I agree with this for my stock funds, but and not sure for bond funds. I still have sold none of my bond funds so far, PCI, PDI, IOFIX, PIMIX, JMUTX, JGIAX, VCFAX, and a little TLT. While they have helped compared to all stocks, they are dropping too. So, does hunker down at this point make sense for bond funds as well? I just hate selling anything in down times, but there is also maybe a case for dodging falling knives rather than catching. :-) BTW I do take some comfort in reinvested divs, but go back and forth with whether or not that is sound thinking.


I was referring to stock funds...stock funds in a bear market...hunker down.  OK to do same day switches, however, to upgrade holdings.  Confession:  I sold the last remaining vestiges of energy funds during the bear, ending a five year project.

I agree re bonds (which are just off of a 40 year bull market high).  I have been far more active transitioning out of bond funds in last two to four weeks.

The irony is in dealing with a stock bear market at the same time as a the  likely end of the 40 year bond bull market/lowest rates ever.  And by ever, a guy did a study that real return rates are lowest in 3000 years!

R48

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Frequent Contributor

Re: What to do now


@DGC wrote:

R-48 Thanks again for your input above. Your thoughts on the AGG or Total Bond funds in this environment?

 

DGC


Sorry I missed your post, DGC.  Thanks for your confidence.

I am further sorry to say that , IMO, your patient, AGG, is very ill!

Like most total bond index funds, AGG has about 45% of bonds in governments...like Treasuries.  It also has 23% in corporates.  The problem is that treasuries got to such low yields, below 1%, that IMO not worth owning.  Then the perfect storm of coronavirus, and selloff was huge.  View a fund, TLT lt treasuries, as an example.  Treasuries being sold for lots of reasons.

AGG has 5.65 year duration, but the average weighted price (M* data) is 108.9.  (Latest data ?)  This means on average the underlying bonds were selling 8.9% above face value.  (Each bond market value is $1089 for each $1000 face).  This means, since bonds are redeemed at par, you lose 8.9% over about 6 years...ouch.

For a month I have been shouting from the rooftops about Vang'ds BND and similar passive all-everything index bond funds.  But so was Jack Bogle before he passed away.  Lastly, bond manager guru Jeff Gundlach recent podcast...he did not like Treasuries, and Corporates.  I mean, really did not like.

Good luck with this DGC.

R48

 

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Frequent Contributor

Re: What to do now

The main reason I sold 99+% is because both stock+bond funds were not working. Bond funds and the credit market are the ones that tells you the real story and why most traders are looking at the credit market first.

At 6 PM I saw the SP500 futures at around +2% and now at -3%.

The hardest of all is to do a lot of nothing, be patient and wait for the next trade but you must know your next trade now and not let your emotion take control.

When the markets will turn around it will be explosive but don't assume we are going to new highs.  Stocks/CEFs will jump nicely but bond funds can do well too. 

YTD...SPY -25.4...HYG -16.3...HYD(HY Muni) -33.3(wow crazy) because NHMAX(HY muni risky fund) only -8.5.

IOFIX -6.8 (it held pretty well until the last several days)

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Participant ○

Re: What to do now

What to do next?  John Bogle's classic advice: "Don't just do something--stand there."

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Participant ○○○

Re: What to do now


@retiredat48 wrote:

@archer wrote:

@retiredat48 @FD1001 

R-48 recommends hunkering down at this point. I agree with this for my stock funds, but and not sure for bond funds. I still have sold none of my bond funds so far, PCI, PDI, IOFIX, PIMIX, JMUTX, JGIAX, VCFAX, and a little TLT. While they have helped compared to all stocks, they are dropping too. So, does hunker down at this point make sense for bond funds as well? I just hate selling anything in down times, but there is also maybe a case for dodging falling knives rather than catching. :-) BTW I do take some comfort in reinvested divs, but go back and forth with whether or not that is sound thinking.


I was referring to stock funds...stock funds in a bear market...hunker down.  OK to do same day switches, however, to upgrade holdings.  Confession:  I sold the last remaining vestiges of energy funds during the bear, ending a five year project.

I agree re bonds (which are just off of a 40 year bull market high).  I have been far more active transitioning out of bond funds in last two to four weeks.

The irony is in dealing with a stock bear market at the same time as a the  likely end of the 40 year bond bull market/lowest rates ever.  And by ever, a guy did a study that real return rates are lowest in 3000 years!

R48


In thinking more about it, my guess is that bond funds will have a recovery just as stocks will. Long term perhaps the bond bull is over but the current has bonds funds going for less than than they are worth. Typical overreaction to current events. The true value of both stocks and bond funds will stop the recovery before returning to recent highs anytime in the near future. True in one sense that the value is what people are willing to pay, but I am referring to value based on their underlying fundamentals. Would you agree?

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Explorer ○○○

Re: What to do now

 

 

  so .... too late to sell IOFIX?  i've gotten rid of 2/3 of my stake but i still own a good bit.  can't decide if it's hunker-downable or not ...

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Participant ○○○

Re: What to do now


@fffloyddd wrote:

 

 

  so .... too late to sell IOFIX?  i've gotten rid of 2/3 of my stake but i still own a good bit.  can't decide if it's hunker-downable or not ...


I guess it wasn't to late if it was b4 yesterdays close! 

 

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Participant ○○○

Re: What to do now

A few months ago I was considering subscribing to Asbury Research for $2000 a year but decided not to based on their record compared to SPX buy and hold. I even took them up on their free trial period.  I figured for the amount of my PF it would not be worth it. Had I done so I would be ahead about 100K and in cash now. Would have been the best $2000 I ever spent. They advised getting out of the market about a month ago, sometime around when the SPX crossed its 50 DMA, (but for reasons other than the 50 MDA). 

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Frequent Contributor

Re: What to do now


@archer wrote:

A few months ago I was considering subscribing to Asbury Research for $2000 a year but decided not to based on their record compared to SPX buy and hold. I even took them up on their free trial period.  I figured for the amount of my PF it would not be worth it. Had I done so I would be ahead about 100K and in cash now. Would have been the best $2000 I ever spent. They advised getting out of the market about a month ago, sometime around when the SPX crossed its 50 DMA, (but for reasons other than the 50 MDA). 


SP500 has touched or breached 50-dMA quite often but then what has been their signal to get in? Sure, 20-20 hindsight looks great for this one time when market took dual hit from coronavirus pandemic and oil crash.   https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=5&mn=0&dy=0&id=p03296871543

YBB
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Participant ○○○

Re: What to do now

@yogibearbull We'll see when they get back in. I get their biweekly reports of their moves. Sometimes they get whipsawed a little. My guess is this time around they will get back in a good bit lower than they exited the market. Their focus is more on not losing than beating the market in the long run. 

They didn't exit based on dipping below the 50. I was just using that as an approximation of where things were at when they exited. They have a combination of SPX rate of change, relative performance of stocks v hiyld bonds, investor asset flows, corporate bond spreads, and a couple other ingredients. What they do with it is beyond me.

 

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