Aitrus' Account Talk

[Birchtree]

June, July and August -by far- the best performing months during an election year. My oceanic took in +$286K/June and -$27K/July. So far only +$23K/August - but then we have 20 more trading days left. Who knows I might clear +$400K for August - now wouldn't that be slick. I know I'm a dreamer.

 

[PessOptimist]

June, July and August -by far- the best performing months during an election year. My oceanic took in +$286K/June and -$27K/July. So far only +$23K/August - but then we have 20 more trading days left. Who knows I might clear +$400K for August - now wouldn't that be slick. I know I'm a dreamer.

That would be very cool for you Birch. Whatever happens you still have the dividends and basis. Since it appears you are accumulating this 300 account not only for yourself but for heirs as well, have you ever considered adopting a fellow new englander?

PO

 

[Aitrus]

That would be very cool for you Birch. Whatever happens you still have the dividends and basis. Since it appears you are accumulating this 300 account not only for yourself but for heirs as well, have you ever considered adopting a fellow new englander?

PO

IFT'd today before noon. New allocation is 70% F, 10 % each G, S and C. I'm done with the L funds.

I'm on the fence between bearish and bullish, so I'm playing safe while hedging my bets.

Logic: if it drops then I'm risking only a little in S and C until I can move it out. If things go up, then I catch the first moves a little and can IFT more to S or C.

 

[Aitrus]

On the 24th I IFTd from 10% G / 70% F / 10% S / 10% C

to

10%G / 10%F / 40% S / 40% C

That was my first real trade. Today, I'm going to 100% G. I'm taking the money and sitting back to see how the rest of it plays out while taking lots of notes. Will it keep going up, or is this just a one-day pop based on news?

 

[crommie]

On the 24th I IFTd from 10% G / 70% F / 10% S / 10% C

to

10%G / 10%F / 40% S / 40% C

That was my first real trade. Today, I'm going to 100% G. I'm taking the money and sitting back to see how the rest of it plays out while taking lots of notes. Will it keep going up, or is this just a one-day pop based on news?

Congradulations Aitrus! Some real quick RadCon math puts this trade at about positive 1.8% depending on how the rest of the day plays out. Now be patient while waiting for the next good buy-in opportunity.

 

[sniper]

never hurts to pocket some gains after a big win

welcome btw, it seems like you joined around the same time I did.

 

[Aitrus]

never hurts to pocket some gains after a big win

welcome btw, it seems like you joined around the same time I did.

Yes, I think we did join about the same time.

 

[Aitrus]

Congradulations Aitrus! Some real quick RadCon math puts this trade at about positive 1.8% depending on how the rest of the day plays out. Now be patient while waiting for the next good buy-in opportunity.

The number crunching says + 1.93%. Now to wait and see what the market does.

 

[Aitrus]

So here's my dilemma. I got out and 100% into G on the 6th anticipating a pullback, but it never happened. Now I see these gains from the Fed's announcement. My quandry is this: Do I get back in now, or wait for a dip?

I figure the risks play out like this:
- If I get in now, the market could go into correction mode on Monday.
- If I don't get in now I don't lose anything, but I miss out on huge gains.

Thoughts?

 

[Birchtree]

Missing out on huge gains would tie my stomach in knots - how much fear do you have. The more fear you have the better - then go against that fear and invest.

 

[Aitrus]

Oh, there's a lot of twisting and fear going on right now. Well, you can't get wet if you don't jump in. I'll move to 90%S, 10% G today.

 

[Boghie]

Aitrus,

At your age and with your investing timeline (25 - 30 years) you should own some stock assets even in a downturn. And, you should contribute ONLY to stock funds. And, if the market collapses you should increase your contributions - most folks will stop them.

I too thought the market was going to correct so I moved to my normal conservative allocation on August 24th. September and October have a lot of variance in their returns. That normal Conservative allocation is: 12/27/37/13/8 (G/F/C/S/I). Guessed wrong, but still made 2.84% since that date. Sitting only in the 'G Fund' would have netted something like 0.08%.

And, now I think those specks in the sky aren't doves but instead big greasy Black Swans waiting to dump a turd right on my Chicken Pox Infected Head (what an absolute misery). Run to 100% G on that thought and that whim and knowing that I might be fever sleeping through a crash. Nope. But get a bit risk off. Now I am 27/27/25/13/8 (G/F/C/S/I). Still have almost 50% in the stock funds. But now a triple standard deviation crash should cost me 15% and I will definitely have time to back away if the market starts crapping out in 8% chunks.

At your age, not having assets in the equities funds and missing 100% of the early action in the booms will put you in the Alpo Meal Deal Retirement Plan. Time is your friend, you need to let your money work for you.

So here's my dilemma. I got out and 100% into G on the 6th anticipating a pullback, but it never happened. Now I see these gains from the Fed's announcement. My quandry is this: Do I get back in now, or wait for a dip?

I figure the risks play out like this:
- If I get in now, the market could go into correction mode on Monday.
- If I don't get in now I don't lose anything, but I miss out on huge gains.

Thoughts?

 

[Aitrus]

That's a good lesson for me. The next time I get out, don't get out 100%. Leave at least some in so I'm earning something when the upside starts happening.

 

[Boghie]

I would strongly recommend listening to Ray Lucia and Ric Edelman and reading their books ('Buckets of Money', and 'The Truth About Money').

Lucia is on the radio nationally every day. San Diego has him at 0900 PST. Ric Edelman has a Saturday show. You can stream both online.

I really enjoyed Edelman's 'The Lies About Money' for those still in their investing years. He has 40 portfolios that he maps you to via a questionnaire. That is how I got my three allocations...

 

[Aitrus]

I read through Edelman's "Lies About Money" (based on your recommendation, I might add ), but it seemed as if his advice was for those that could invest in vehicles outside of things like TSP. I didn't know how the TSP funds would translate into his formulas. It's something I've been meanining to ask about here, but I guess now's as good a time as any.

My understanding is that the S and C funds are just different areas of stock, the I fund is International stocks. How do those fit into Edelman's portfolios? It looked to me like he was breaking areas of the market down a whole lot further than TSP's simple breakdown.

 

[Boghie]

I read through Edelman's "Lies About Money" (based on your recommendation, I might add ), but it seemed as if his advice was for those that could invest in vehicles outside of things like TSP. I didn't know how the TSP funds would translate into his formulas. It's something I've been meanining to ask about here, but I guess now's as good a time as any.

My understanding is that the S and C funds are just different areas of stock, the I fund is International stocks. How do those fit into Edelman's portfolios? It looked to me like he was breaking areas of the market down a whole lot further than TSP's simple breakdown.

That's Awesome Aitrus - and absolutely proves you read the book. I spent the early months after reading it trying to group his sectors into our options. I know I missed on some early mappings - and, I know I am not perfect now. Regardless, this is how I break it down (damn, I let someone borrow the book and it has vanished again):

G Fund: Cash, extremely short term bonds, resources (gold and commodities). He never really has much in commodities anyway.
F Fund: The rest of the bonds. I add in the Real Estate stuff here too. I don't think you can really match the international bonds.
C Fund: The Large Cap Value and Growth.
S Fund: The rest of his U.S. Market equity funds. That is what it is...
I Fund: International Equities

The things hanging out there in no-mans land are REITS, commodities, and international bonds. I just add those up in the most similar fund based actually on reading Lucia's Bucket's of Money. I think it is an educated guess, but... Early on I way overdid the 'G Fund' then I read the book more carefully.

I think the toughest thing was finding my normal allocation. We were at the end of a crash and I was way over conservative. I had to step back and kindof ignore crash stats. That was hard. Then, I knew that I like to flex the account. Why sit in the exact same allocation in 2008 as I do in 2009 as I do in 2012. Finally, I'll also play the margin and allocate with a little difference based on what is flying overhead. Don't much like international or bonds right now so a couple of those point get migrated. But a bond correction should be slow enough to adjust to.

Enjoy...

 

[Aitrus]

That's a great breakdown. Looks like I need to check that book out again from the library and go over the figures and numbers again. Where would you put Emerging Markets? Or would that fall under S, along with the rest of the equities?

From what I recall, you said that you have 3 basic allocations - a conservative one, a normal one, and a bullish one, correct?

 

[Birchtree]

The bond correction when it arrives will go on for years - it just completed a 30 year bull move. There will be so much money finally seeking a positive return. I expect that my margin rates will stay stable until the Fed target date of 2015. I'm holding my SPX target of 1700 by the end of the year.

 

[Boghie]

That's a great breakdown. Looks like I need to check that book out again from the library and go over the figures and numbers again. Where would you put Emerging Markets? Or would that fall under S, along with the rest of the equities?

From what I recall, you said that you have 3 basic allocations - a conservative one, a normal one, and a bullish one, correct?

There really isn't a match for Emerging Markets. The 'I Fund' would be the closest, but it is not close. Emerging markets are Brazil, Russia, India, China, and a myriad of smaller markets. The 'I Fund' is Europe and Japan and only the large companies - kinda like the S&P500 (C Fund). Use that, plus the real estate and commodities to overallocate a fund you think will do better.

BT is right, when bonds (F Fund) start dropping they will drop for a long time. But there is so much money in them they tend to drop in very small increments. The only times I've seen otherwise are the computer trade influence flash crashes - which just get bought up in minutes anyway.

On a positive note - with all the excitement at various colleges and embassies and at the Fed - the market is still inching up.