day trading vs hold steady

[rokid]

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Mike wrote:

Has anyone figured out what the "ideal" frequency of rebalancing is?

Nope. I've read quarterly, semi-annual, on your birthday, at the end of the year etc.

Personally, I'm trying to take advantage of the market momentum effect, i.e. the idea that an asset class will continue to do well for a while before it mean reverts.

As a result, I've decided to rebalance, on a yearly basis, only those asset classes that are +/- 5% from their designated allocations. If they get out of wack before that, I'll just let them ride.

We'll see how it works out.

 

[DrD]

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Well, I guess this is it.

I have moved 50% G 50%I effective Monday. I wasn't going to do anything until April, so if you are looking for capitulation, this might be your sign.

My thinking is that the I fund MUST continue to do well, and that US stocks are very risky now with oil, etc. I'll wait until C and S hit bottoms, and then try to get back in.

TSP Talk, you have corrupted this buy and holder into thinking that he is smarter than the herd. no good can come of this.

Best wishes
DrD

 

[tsptalk]

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DrD wrote:

TSP Talk, you have corrupted this buy and holder into thinking that he is smarter than the herd. no good can come of this.

:l It was just a matter of time. Good luck!

 

[Rolo]

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DrD wrote:

TSP Talk, you have corrupted this buy and holder into thinking that he is smarter than the herd. no good can come of this.

LOL!

Just don't try to get ... "cute" with yer money.

 

[tsptalk]

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tsptalk wrote:

DrD wrote:

TSP Talk, you have corrupted this buy and holder into thinking that he is smarter than the herd. no good can come of this.

:l It was just a matter of time. Good luck!

But seriously, this is exactly what happened to me. I've always followed the market but somewhere duringthe mid to late-90's my TSP account balance started to look likeserious money. I started watching it more regularly even though we couldn't do much about it (transfers were allowed only once a month with min 2 week wait before effective.) The more you watch, the more you have a hard timesittingby idly because patterns andtrends start making themselves more obvious to you. Yada, yada,yada, I became a shorter term investor.

 

[mbehr55]

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I can't/won't leave my TSP alone now. After seeing the losses from 01 and 02 I started looking for a way to get some buy/sell (mostly sell) signals to limit the losses. I was also looking for some allocation recommendations. Thanks to this site and others I have recently found, I'm keeping a tight reign on my account. I won't always make the right decision but at least now I'm informed and won't let the market shoot me in the foot like the 01 tech crash.

I love technical analysis.......it's fun!

 

[DrD]

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From Tom's market comments on 12/13/05:

"My longer term buy and hold return is up about 9% this year, but my actual trading account return is flat lining and could use some defibrillation."

Anyone want to reopen the active trading versus buy-and-hold discussion?

Best wishes
DrD

 

[mbehr55]

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Lately, I've been using the fund graphs with moving averages at TSPMoney.com. I'm playing with two moving averages to tell me when to buy/sell. Currently using 10 day and 20 day. May switch to 13 and 26. That and watching the morning futures have been all. The last week or so the morning futures haven't been exactly "on the money." I also look at charts on IVV, IWM, VXF, EFA, and AGG for more technical analysis to compare to the corresponding funds.

F= AGG
C= IVV
S= IWM or VXF
I= EFA

Buy and Hold.....no way!

 

[neirbod]

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Seems like the "buy and hold" vs. "active trading" tags are too black and white. Some people on this board make mulitple trades each week, some a few a month, some one every few months. All are active traders, but each has a very different stategy, and some trade infrequently enough that they are essentially buy and holders. Seems like a better distinction would be a finer scale, something like: "very active" (>1 trades a week), "active" (>1 trades a month), "infrequent" (>1 per year), and "buy and hold" (<= 1 trade a year).

That being said, since I have been active on this site (about3 years) I have not seenmuch good evidence that frequent trades has helped many people on this board. A very few do significantly better than the market (although different peoplefrom year to year), many are on par with themarket, and a substantial number are doing worse compared to an agressive buy and hold allocation. Maybeunder different marketconditions we would see greater benefit, but for my limited sample size I can see no great benefit, and significant potential harm, for those who are constantly moving money around. I include me in this category, by the way. Although I am doing pretty well this year, I would have done significantly better with my preferred long term allocation (40 C, 30 S, 30 I) compared to my actual retun. I for one have concluded that I do better with fewer trades (e.g. 1-3per month).

Thanks again to Tom and everyone for this great site. 3 years ago I wouldn't even be thinking about allocations and investment strategies. I am still learning a lot, and I am sure will be changing strategies along the way as I gain more knowledge.

Dave

 

[cowboy]

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I like your post neibod! I am probably what many would consider an active trader as u say. But the truth is the averages and the markets trade and change daily and when u look back at your post, yesterday, 1 month, 3 months, a year from now your annalysis would change also. In other words it is a moving target and to compare to the markets or an average is a start but it doesn't in my opinion do justice. The main thing is to set long term goals and an interest rate you want per year till retirment and go for this. That is what will build to a very nice nest egg for you. Try to reach that goal annually and you will not worry about making that killing that most try to do. I have reached my goal for the year and feel great about it. I am preparing for hopefully another good year next. Do I hope to make more? Yes, I do but being greedy also costs u sometimes. It doesn't matter in my opinion what any of us do as the only way you can make money is to risk it and when u take that chance there is always a probability of it going against you. If there is one thing to learn it is that setting G or F fund is not where you want your money long term.

 

[The_Technician]

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I'm slowly going to an active trade status.....just a few more details to work out...
:dude: