Category: Finance

Another technique which is similar to timing is to set a goal for a particular investment. If it is a stock fund that might be 10% per year. After a year if the fund hasn’t gone up 10% you put enough money in to bring it up to 10% more. If it has exceeded 10% you sell enough shares to bring it back down to the target. This assures that you buy during downturns and sell during peaks. But the problem with it is that it assumes you have cash on the sidelines available to prop up poorly performing investments.

If you wanted you could do the adjustments on a quarterly basis rather than yearly and the results should be better. This wouldn’t really work with my deferred compensation account since I don’t have cash available and have to make regular rather than lump sum payments. So I might try it with some of my other mutual funds starting on June 1 meaning my first adjustment wouldn’t be until September 1.

After writing my last entry about market timing I decided to abandon it on 3 of my 4 mutual funds and just apply it to Fidelity Over the Counter (FOCPX). That was my intention originally but then I started doing it on the others. Naturally as soon as I gave up it started working.

Continue reading “Market Timing Part 3”

Delta went down to around 7 a year or so ago after being at 60 before the crash and 9/11. I thought it had to be a good buy except that it’s earnings at that time were -$15 a share and projected losses were $6 a share. It just seemed like a company couldn’t possibly lose that much money. But they bottomed out and went up to around 15 before starting to work their way down again. Earlier this week they released the earnings which were bleak again and their stock was back in the 7’s. I thought it was interesting but I’d hold back. Today it dropped in the mid 6’s so I bought some. It’s very speculative but hopefully it will go up. As soon as I bought it I wished I’d bought more, but that was the greed talking. I will buy more if goes down 20%, but I’m thinking I won’t sell unless it goes up 40%.

I posted my first entry on market timing last May. The market had bottomed out and was on the rise and I wanted to a way to stay out of future declines while still being invested during rallies. Market timing seemed to be a way to do that and I decided to play around with it in my deferred compensation account which allows me to get in and out of my mutual funds without paying capital gains taxes or incurring sales charges. I was going to do it with only Fidelity Over-the-Counter (ticker: FOCPX, 20% of my portfolio) but decided to apply to my others as well including Vanguard Index 500 (VIIIX, 60%), American EuroPacific Growth (AEPGX, 10%), and Ariel Fund (ARGFX, 10%). I would use the 50-day moving average. When the current price drops below the 50-day moving average you sell. When it goes back above the 50-day moving average you buy it back. You can refer back to my original posting to see how well this can work.

Continue reading “Market Timing Part 2”

I’m always looking for ways to invest. Lately gold has gone up a lot from $300 per oz a few years ago when all the countries were selling off their gold reserves up to $400 per oz now. So I was wondering how you can buy gold even though I’m not really seriously considering it (Motley Fool points out that if you bought $1 of gold in 1802 that today it would be worth $0.98 adjusted for inflation (however with the US on the gold standard, the value didn’t change by much until the 1970’s when the US finally let the currency float; it’s probably not fair to compare stocks and gold prior to 1971; US bonds would be worth $304; regular bonds $952; and stocks $599,605) but I wanted to know how it would work.

Continue reading “Gold, GOLD, GOOOOLLLDD!!!”