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Old 07-04-2014, 12:39 PM
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Default I don't think I can time the market, but...

A correction seems imminent, such a long period of strong returns, rock bottom interest rates can't last forever, now seems like the time to cash in......
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Old 07-04-2014, 02:16 PM
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In 2012 they were talking about hiking the interest rates in 2013. Now we're talking about maybe 2015.

The markets will correct eventually, but they could also run up another 15% first and who knows? By then maybe fundamentals will have caught up a bit and the downward correction won't be any worse than where we're at now.

All that being said, I am taking some action. 80% of my portfolio is dollar cost averaging big mutual funds. It just had too long of a track record of success. The other 20% I play around with. So far the 20% is beating the 80% but as I said in another thread, I came of age at the bottom of the recession so I don't want to think I'm some sort of guru because all I've known is a bull market.

I've sold off a bit and moved into a Gold ETF. I'm going to cash in a lot of my AAPL stock later this month and stick it in a CD or a money market to put towards a rental property.

What is your plan? Sit on cash until the correction happens and buy back in? Or are you considering other investments?
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Old 07-04-2014, 07:12 PM
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Quote:
Originally Posted by redprinceton View Post
In 2012 they were talking about hiking the interest rates in 2013. Now we're talking about maybe 2015.

The markets will correct eventually, but they could also run up another 15% first and who knows? By then maybe fundamentals will have caught up a bit and the downward correction won't be any worse than where we're at now.

All that being said, I am taking some action. 80% of my portfolio is dollar cost averaging big mutual funds. It just had too long of a track record of success. The other 20% I play around with. So far the 20% is beating the 80% but as I said in another thread, I came of age at the bottom of the recession so I don't want to think I'm some sort of guru because all I've known is a bull market.

I've sold off a bit and moved into a Gold ETF. I'm going to cash in a lot of my AAPL stock later this month and stick it in a CD or a money market to put towards a rental property.

What is your plan? Sit on cash until the correction happens and buy back in? Or are you considering other investments?
I'm cashing out one stock at a time until I have as much as I need for a house liquid (I'm looking to buy). I also have some short treasury etfs to hedge against rising rates. But once I've settled in a new house I'll invest back to normal depending on the market.
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Old 07-06-2014, 06:40 PM
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Originally Posted by snikelfritz View Post
A correction seems imminent, such a long period of strong returns, rock bottom interest rates can't last forever, now seems like the time to cash in......
I don't understand why I keep seeing these kinds of threads.....

Given even the pro cannot time the market, why do you still bother with top/bottom calling?

I am still not seeing any catalyst that will cause a big crash like 2000 (over-evaluation) or 2008 (financial crisis). It is not abnormal to see a 10-15% pullback at any time. Unless you are an active trader, I don't see any reason to make big changes to your portfolio.
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Old 07-07-2014, 01:33 AM
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Originally Posted by Ninja Warrior View Post
I don't understand why I keep seeing these kinds of threads.....

Given even the pro cannot time the market, why do you still bother with top/bottom calling?

I am still not seeing any catalyst that will cause a big crash like 2000 (over-evaluation) or 2008 (financial crisis). It is not abnormal to see a 10-15% pullback at any time. Unless you are an active trader, I don't see any reason to make big changes to your portfolio.
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Old 07-07-2014, 02:24 AM
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Ride it out till 2017, that's when the crash will happen.
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Old 07-07-2014, 08:15 AM
AO_Throwaway_Acct AO_Throwaway_Acct is offline
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I'm in a similar boat as OP. Invested a few thousand for the first time in May and it's made 9.8% since. It's hard to imagine that the trend will continue, so I'm hesitant to put more in. For now, I'm just going to leave what's there... When I have more "play money" then I'll reconsider.
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Old 07-07-2014, 11:40 AM
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When you doubt your ability to time the market, what time horizon are you giving yourself? If you're trying to predict where the market is going this month, this quarter, or even this year, then you're just gambling against pros who may be marginally better at this game than you. But if you're thinking that stock valuations are way out of line with historical norms and that there will eventually be a correction, then you're probably right.

The other possibility is that current valuation levels represent a new normal and "this time it's different." Good luck with that.
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Old 07-07-2014, 02:13 PM
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My 401K was heavily invested in small cap index funds until very recently. Like you, I got nervous that a correction is coming. So now I'm split equally between bond index funds, international equity index funds, and domestic equity index funds. Of course, this strategy is by no means a perfect hedge, but it felt safer for the time being.

If we get a big correction, I may move back to my previous position.
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Old 07-07-2014, 02:18 PM
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Quote:
Originally Posted by redprinceton View Post
In 2012 they were talking about hiking the interest rates in 2013. Now we're talking about maybe 2015.

The markets will correct eventually, but they could also run up another 15% first and who knows? By then maybe fundamentals will have caught up a bit and the downward correction won't be any worse than where we're at now.

All that being said, I am taking some action. 80% of my portfolio is dollar cost averaging big mutual funds. It just had too long of a track record of success. The other 20% I play around with. So far the 20% is beating the 80% but as I said in another thread, I came of age at the bottom of the recession so I don't want to think I'm some sort of guru because all I've known is a bull market.

I've sold off a bit and moved into a Gold ETF. I'm going to cash in a lot of my AAPL stock later this month and stick it in a CD or a money market to put towards a rental property.

What is your plan? Sit on cash until the correction happens and buy back in? Or are you considering other investments?
I don't see any drastic correction occurring. The market will be impacted by the phased increases in the discount rate, but that will be about it barring some calamity.

You can expect growth and inflation to be low for the next few years as well, so you should tailor your investment strategy accordingly.
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