SkyPilot
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quote:
Originally posted by Jaszbo
I believe in exactly what the government believes in by offering you guys the L fund.
This statement may be the fatal flaw... 
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Mon Mar 06, 2006 3:31 am |
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Jaszbo
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I was looking at some of my books that I have laying around and the book I'm sure most of you have at least heard of called "A random walk down wall street", which was first published in 1973 and is now on it's 9th edition coming out this year. The author is Dr. Malkiel, who's a proffesor at Princeton, was the first on who published in his book how we would be better off with an index fund and John Bogle founder of vanguard made it true to the public a few years later. If you ever look at the history of index funds you'll always see these two names.
A random walk down wall street is actually considered an investor classic
Anyway there's a section in the book called Verdict on market timing that I will quote, which is actually taken from John Bogle's book commons sense mutual funds, but I can't find my copy here with me, so I'll just write exactly what the book wrote:
"Many proffesional investors move money from cash to equitis or to long-term bonds based on their forecases of fundamentla economic conditions. Indeed, this is one reason many brokers give to support their belief in professional money management. The words of John Bogle, founder of The vanguard Group of Investment Companies, are closest to my views on the subject of market timing.
Bogle said: "In 30 years in this business, I do not know anybody who has done it successfully and consistenly, nor anybody who knows anybody who has done it successfully and consistently. Indeed, my impression is that trying to do market timing is likely, not only not to add value to your investment program, but to be counterproductive."
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Tue Mar 07, 2006 12:54 am |
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SkyPilot
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Yes, but Bogle wrote that before he could watch what we do here.
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Tue Mar 07, 2006 3:59 am |
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trisha
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In spite of all the education I've had here in the recent days - I still don't see how this relates to TSPers and the options we have presented to us. I can see how the administration, by giving tsp folks only 2.5hrs to make any decisions about their funds curtails any day trading. But I don't recall anyone talking about `market-timing' except those who preach against it. Is it actually market timing if you get oo a fund that has a downward trend that shows no sign of stopping? Or buy back into it when it gets back up to where you jumped off? I would think that would be a `stop' or a `buy' order.
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Tue Mar 07, 2006 6:33 am |
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Jaszbo
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TSPers are not special in what they can invest in. The operating expenses are low, but the C, S and I fund can be purchased at vanguard as well as a lot of other places.
If you buy and hold and never change that is not market timing, if you buy and hold and changed ONLY based on either reblancing your portfolio or due to age allocation that is not market timing. Everything else is market timing. Regardless if it's daily, monthly, or yearly you see something on the news, you get a tip and you think you are timing the market to change funds, that is market timing or if you think one fund is doing better than another and it's time to jump, becuase you are timing another market to do better right now. All of these are timing the market.
Regardless if it's your TSP or your Roth IRA as you can invest everything from your TSP at vanguard for instance except the G fund.
"Is it actually market timing if you get oo a fund that has a downward trend that shows no sign of stopping? Or buy back into it when it gets back up to where you jumped off? I would think that would be a `stop' or a `buy' order." Yes it's market timing
The TSP does not offer stops and we're not talking stocks here or ETFs. The difference is you can trigger an ETFs instantly, while mutual funds are daily.
Though I do not consider trailing loses of 10% or 25% even as timing the market, but technique to prevent looses and there's no point in talking about it, because once again it doesn't apply to index funds.
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Tue Mar 07, 2006 1:18 pm |
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Rolo
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quote:
Originally posted by Jaszbo
...Everything else is market timing.
Well, then, since you ignorantly lumped together many different and unrelated approaches and condemned them all, you undermined whatever your message was.
quote:
Originally posted by Jaszbo
if you think one fund is doing better than another and it's time to jump, becuase you are timing another market to do better right now. All of these are timing the market.
If? Any reasonable, prudent person can guage the general trend of two funds; we're talking concrete, tangible numbers, not some voodoo. If one can properly use the > and < symbols, he's set!
Anybody with any kind of clue (and a pulse) avoided bonds for the past few years due to the absolutely concrete and non-mysterious interest rates. You call such people 'market timers'. I call it 'having enough sense to get out of the rain'.
quote:
Originally posted by Jaszbo
Though I do not consider trailing loses of 10% or 25% even as timing the market,
Now you're backpedaling. Which is it? You contradicted yourself.
So when do you buy back after this trailing loss?
The inevitable conclusion to what you just considered NOT to be timing is to sell after a trend reversal and buy after the trend reverses again....something I would call timing.
The Messiah never contradicted Himself, so neither should those with Messiah complexes.
quote:
Originally posted by Jaszbo
there's no point in talking about it, because once again it doesn't apply to index funds.
Oh! There IS a point in talking about it! After all, YOU brought it up!
It most certainly can apply to index funds (anybody can sell/buy his index fund in the same scenario you mentioned).
Even more curious I find, it applies more so to YOUR index funds--ETFs--since the main point of having an ETF is that you can time them better and set stops/triggers/etc. just like day-trading stocks. Why else you pay the trading commission on an ETF when you can avoid that by buying a regular index fund?
"Expect me when you see me."
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Sun Mar 12, 2006 3:21 am |
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Jaszbo
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let's just let this one rest, becuase it's getting old. I'll just answer your own question
"Why else you pay the trading commission on an ETF when you can avoid that by buying a regular index fund? "
Tax advantage, you can also get in with only 65 dollars a share for certain funds compared to 3,000 for index funds, operating expense is lower also.
The truth is about 50% I buy and hold completely and don't watch it what so ever. I have the Total stockmarkt index, REIT and EAF, but I'm slowly getting out of the REIT.
I belive long term buying and holding is a much much better choice. For short term I personally rather lower my losses. What I mean is that if I bought and hold and I could have a 12% return after 10 years with a 2 or 3 years down or I could have a 10% return with never being down, I'd rather personally rather take the lower return than the buy and hold strategy. It's an emotional thing and I buy other investmetns such as real estate and when I want money I want it there. Therefore 50% of the my outside retirement I use for those three that I really don't watch as much. Then I have some ETFs like in Brazil that I do have a trailing stop on them and watch them, but far from a day trader. They only sell when there's a loss as I ride out when it's doing well.
I don't time what's doing better, I just do time when something has a 10% decline I get out then. I am very aware that in the long term it's a worse strategy. I'm very aware that buying and holding out for the long term I'm better off. It's why I treat my retirement account 100% different.
You cannot play with retirement money, but you can play with outside of retirment money.
For instance I have stock in a brazilian oil company and that would just be an absolute crazy thing to do in a retirement account.
Please do not reply with more questions, becuase I'm sure nobody wants to read them anymore. I really don't have anything more to say about timing the market. If you have questions directed towards me, send me a PM, becuase this subject is getting old and there's plenty of books on the subject.
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Sun Mar 12, 2006 2:24 pm |
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Rolo
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quote:
Originally posted by Jaszbo
...I could have a 12% return after 10 years with a 2 or 3 years down or I could have a 10% return with never being down, I'd rather personally rather take the lower return than the buy and hold strategy.
Asinine.
"Expect me when you see me."
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Sun Mar 12, 2006 2:48 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by Jaszbo
If you have questions directed towards me, send me a PM, becuase this subject is getting old and there's plenty of books on the subject.
And you speak contrarily to those books.
I have no interest in talking to you personally, only correcting the heresy you post; don't pawn emotional garbage as financial advice and I won't call you on it.
"Expect me when you see me."
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Sun Mar 12, 2006 3:18 pm |
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