Timing the markets part 1

I am a big fan of timing the markets. Market timing involves buying low and selling higher and selling high and buying lower. There are many “authorities” on the subject who will not agree with me. Motley Fool states “Trying to time the market isn't a smart idea” CNBC states “Trying to time the market is a losing game”. I could site more articles but I won’t bore you just Google “market timing doesn’t work”.

I do not agree with the experts. I don’t know about you but my parents taught me to time the markets at a young age. From the time I was little my mother would scour the Kroger ad when it came for deals. I dreaded when chicken was on sale. I grew to dislike chicken. Chickens were on sale at the store for 9 cents each limit two per customer. My dad had four chickens on the belt. The lady behind the register said sorry sir limit 2 per customer. My dad told me to stand behind him, took two of the birds and placed them in front of me on the belt and handed me two mercury head dimes and told me to give them to the lady when she asked me to pay. My mom would cut the chickens up and we would eat two that week fresh and freeze the others. Yes others as my dad worked close to the store and would buy more chickens every day. My mother got very creative when it came to cooking chicken. Did you ever have chicken cupcakes? It is cornbread chicken and whatever veggies were on sale. My parents would buy cuts of beef, pork and at times whole turkeys when the price was right. By timing the market in this case the food ad my parents were able to feed our family are a lower price.

How about you have you ever drove by a gas station and saw they raised the price, driven by another gas station that had not raised their price, drove in and filled your tank? If so you have engaged in market timing.

In a similar way any one can time the stock market. The goal of market timing is to beat buy and hold. Most investment advisors like the buy and hold philosophy. They also subscribe to dollar cost averaging which I will discuss in a later post. (I strongly agree with the concept of dollar cost averaging.). Buy and hold means you take a sum of money and buy an investment. Unless you have a life changing event you keep it and do not sell it.

It does not take a lot of thinking to realize that when you fill your tank as described in the example above you are going to save money on your average cost of gasoline. The same can be said when you invest in the market.

So how does one time the market? I do have a complex set of mathematical equations which I use to time the market. I do not recommend this to anyone unless they are willing to put hours of research and practice into timing the market. To get improved results in your portfolio all one must do is add money to the market when you hear on the radio the market is down badly and sell some of your stock mutual funds when the market is at record highs.

High Octane Exchange traded funds.

Exchange traded funds sometimes referred to as ETFs can be a great investment. In the last decade a product called leveraged ETF’s has emerged. One fund which I actually own is TQQQ. The company that runs the fund states “ProShares UltraPro and UltraPro Short ETFs offer 3x and -3x exposure to major market indexes. They offer what, for many investors, is a more direct and efficient way to capitalize on market opportunities using leveraged and inverse exposure.” This fund is not for the faint of heart or the casual investor.

Substantial gains can be made using these funds. Let’s assume that I bought $10,000 worth of TQQQ when it first traded nine years ago on February 11, 2010. On August 30, 2018 it would have been worth over $450,000. Nice gain! By Christmas Eve it would have been worth only $186,000! Kind of hard to take that loss! Losses like this are nothing new to this fund. From July 26, 2011 to August 19 of the same year the fund lost almost one half of its value. Looking back if I would have bought on Christmas Eve I would have got in excess of a 50 percent gain as of this writing.

There is a wide array of leveraged ETF’s more than 160 that anyone can count. They are not for everybody. I do not recommend putting more than a small percentage of my assets in these funds.

Leveraged ETF’s can be helpful if you are timing the markets which will be the subject of my next blog.

Great mutual fund tips Gabelli Dividend & Income Trust symbol GDV

Now that I have some time on my hands I am going to blog again on investing and mutual fund tips. Today I am going to point out the virtues of a fund that I bought a few weeks back. From the Gabelli web page their description is “The Gabelli Dividend & Income Trust, or the Fund, is a diversified, closed-end management investment company whose objective is to provide a high level of total return.” In plain English this is a closed end mutual fund. Closed end mutual funds are funds that trade like stocks and they have a fixed pool of money. Unlike a traditional mutual fund which have their total assets increase when people invest more money into them and decrease when people redeem their shares. In a traditional mutual fund a manager must constantly be wary of mass redemptions as well as getting too much money sometimes called mutual fund bloat where the manager cannot find good investments for the fund’s assets. A closed end fund does away with those problems.

So why do I like Gabelli Dividend & Income Trust? Lots of good reasons. This is a relatively low volatility fund with a handsome return. In the last 10 years this fund has produced 13.45% per year. Get that from your local credit union! This fund is diversified as of their last report there were 475 different holdings. More holdings equal less risk. This fund has a net asset value of $22.64 (today) and the last sale today on the New York Stock Exchange was $20.82 (I invested at $19.87 two weeks ago. I’ll discuss more in the future.) The net asset value is what the fund is worth if it were liquidated and everyone paid their portion. At $20.82 the fund is selling at a discount today. I would never buy a closed end fund if it were not selling at a discount. This fund has a handsome discount right now relative to historical norms. I also like this fund because the managers of the fund attempt to invest along Catholic / Christian principals. It pays an 11 cent per share dividend per month which is great for an old retiree like me.

I doubt you can buy Gabelli Dividend & Income Trust in your 401K. You may be able to buy it in your IRA if you can buy stocks or exchange traded funds.

Buying at $19.87 is something called “market timing” which I am going to discuss in a future blog.

Market timing does work.

I am sick of reading fools tell us that market timing does not work. All I can say is those people all are fools who do not understand cause and effect. More in a later post. I am coming back to blogging. I want to make people who follow my blog rich. More later. Right now I am almost all in the market and you should be too. EOM

The best small cap funds

I have re evaluated my small cap funds for 2015.  Small cap fund selection is one of the most important investment decisions you will make!

The best small cap funds

An even better time to sell.

With the NASDAQ near the 3400 mark and the SP500 at record highs now is the time to sell off some of your stock market portfolio. The old adage sell in May and go away is very true this year. This market has gone straight up since mid November. I doubt it will continue.

Time to sell!
The NASDAQ closed at 3154 today. That is a nice high. In my opinion I believe the market will trade lower than today at some time in the next few months. My mathematical model is giving sell indiactors at this time. If you got into the market on my last buying signal you would have bought on November 13 when the NASDAQ  closed at 2883. With the S&P 500 trading near record highs it is not the time to be in the market. The market is up 10% in the last 10 weeks.
Paul

Time to buy

Well I must admit I blew it.
I was going to post back around Labor Day that it was time to take some money off of the table. Well I did not post that. (The NASDAQ was around 3200) Still if you have cash on the sidline I am adding cash to the market on any weakness here. The market may go lower as tax policy most likely will not be as favorable for investor and I do see some profit taking. (Much of it may have already taken place). The NASDAQ  closed at 2904 today. I will save my political commentary. You can listen to Chris Mathews or Rush Limbaugh for that. When others are selling and afraid it is time to buy.
 

The best Midcap Funds for 2013

The best Mid cap Funds for 2013
I have a new list of funds this time in the mid cap arena. This is the first in a series of updated funds. A wise investor always has an asset allocation and mid cap funds should be part of that allocation. I will be doing a host of new fund updates so please check back for later editions.
The best Mid cap Funds for 2013

 

The best large cap funds 2012
I have a new set of great funds for mid 2012. This is the first of many of my updated fund recommendations. Stay tuned for more. If you would like to see other types of funds covered leave a comment below. Times change and so should your investments. What funds are new and which have been dropped from my preferred list? You can find out just click the link. 
 The best large cap funds 2012.

Better buy than I expected.

I called for a buy mid day on May 17. If you happened to catch my call on that day the NASDAQ closed at 2814. Assuming you work for a living as most of us do you may not have gotten in until Friday May 18 when the NASDAQ closed at 2779. I am not going to say the market bottomed last Friday. What I am saying is if you followed my advice you would be far ahead of the market than the buy and hold mentality.
I am still a buyer on weakness at these levels (the NASDAQ closed at 2839 today).

Time to Buy!!!!

If you followed my advice last time you would have gotten out of the market on Feb 3 when the NASDAQ closed at 2905. At this point the NASDAQ is trading at 2861. This is not a significant gain this time but you were not taking the risk of the market and there is always some interst gained from money in a money market fund.

It is time to sell.

If you have been following my posts you would have bought into the market on August 9, 2011. The NASDAQ closed that day at 2381.

At this point I recommend selling as long as the market is flat or up. Today the NASDAQ closed at 2859 which is near a ten year high. That is 20 percent over the last few months.

I believe market conditions are still favorable at this time but I also believe the market will trade lower in the future.

It is time to buy!

If you have been following my blog you would have reduced you market positions on November 8, 2010. On the Saturday before I made the call to reduce holdings in the market. On 11/08/2010 the NASDAQ closed at 2580. Today the NASDAQ closed at 2357. I am going to assume you would have made some money in a money market fund.

I have gone from a 50 percent cash position to a 130 percent long position. (Symbol TNA but in limited portions).

The best emerging market fund

The best emerging market fund
What are the best emerging market funds? Why I really don’t like these funds even if they are the best funds which have had outstanding returns? Read The Best Emerging Markets Funds to find out.

The 20011 IRA portfolio in trouble?

The 2011 IRA portfolio
The 2011 portfolio is out! Check it out!
Ihe 2011 portfolio is 1 percent behind the S&P 500 index as of this long Easter weekend. One percent is not a huge lead. The portfolio has 20 percent global stock funds which have not done well this year. The Westcore Select fund is up a nice 11.3 % YTD!


The 2011 IRA portfolio

The M&I Trust 401K review

The M&I Trust 401K review
I have looked over quite a few 401K plans. This is one of the nicer plans around. Compare The M&I Trust 401K review to your 401K.

The General Motors 401K review

The General Motors 401K review
This 401K plan is the first plan I am going to review. The plan is better than many I have looked at but far from the best. Read more about the General Motors 401K plan.

The Closed End Fund Portfolio

The Closed End Fund Portfolio
The closed end portfolio is a list of what I believe to be the best value in closed end funds at this time. Having never lost money in a closed end fund I find them more attractive as I approach retirement. At this time I am short term bearish on the market and would wait for a market dip to add new money.
The Closed End Fund Portfolio

The 2011 IRA portfolio

The 2011 IRA portfolio
The 2011 portfolio is out! Check it out!
The 2011 IRA portfolio

Market Timing Signal 11/06/2010

The markets are now trading near their 11 year highs as of Friday. Market conditions are ripe for a dip in the market. The market may not drop next week but it is my belief that it will trade lower at some time over the next three months than it is trading at this time. The Federal Reserve is beginning to print money. This could lead to inflation which could really kill this recovery. Don’t get me wrong I think the market has room to run up and will for some time as conditions are still bullish. At this point I am taking profits and will wait for the next dip to buy back into the market. Over the past two years I was of the opinion that US small caps were the best asset class and my favorite fund Royce Low Price Stock fund RYLPX has done very well. When the next buying opportunity strikes I will make my recommendations at that time.

The 2010 portfolio continues to make money.

Fund picks for 2010

October was another great month to be in the market. as of this writing the S&P 500 up about 11 percent for the year. The S&P 500 actually outperformed the 2010 portfolio for the month of October but the 2010 has a nice lead on the market. The 2010 portfolio is up over 19% for the year. All of the funds have nice returns. The only stock fund lagging the market is the Yacktman Focus Fund which is only up 10 % for the year. The Gabelli Gold Fund is up a handsome 36.5% for the year. Coming soon is my 2011 portfolio which will feature some changes from the 2010 portfolio


Fund picks for 2010

Fund picks for 2010

September was a great month to be in the market. The S&P 500 is now up about 4 percent for the year. Contrast that with the 2010 portfolio which is up 13.7 percent for the year as of today. The top performer is the Gabelli Gold fund which is up a handsome 32+ percent for the year to date. Also doing very well is the Janus overseas fund which is up just under 15 percent for the year. All funds in the portfolio are up more than the S&P 500 index.
Watch for my 2011 portfolio which will feature some changes from this years portfolio.

Fund picks for 2010

2010 portfolio keeps beating the market!

Fund picks for 2010

The 2010 portfolio continues to outpace the S&P 500 for the year. The index is down 2% while the portfolio is up a nice 5.8%. Leading the way is the Gabelli Gold fund which is up nearly 20% for the year. All funds in the portfolio are up for the year. The Yacktman Focus Fund has the poorest record with a 1.6% gain.

Fund picks for 2010

The 2010 portfolio end of July report.

Fund picks for 2010

The 2010 portfolio like a broken record continues to outpace the S&P 500. The S&P 500 is down less than 1% year to date. As of this date every fund in the 2010 portfolio is making money. The portfolio is now up 5 percent for the year. The Lazard Emerging Markets Equity Fund is at this time the leader for the year with a seven percent gain. It seems every month when I report on this portfolio a different fund is leading the way.


Fund picks for 2010