Stock Market

tompalm · Feb 6, 2016

Mary Ann Bartels, Cheif Investment Officer from Merrill Lynch was on CNBC today saying this is a bull market that will continue and to stay the course. She is known as a technical analysis expert and asked about where the market is going. She replied that SPX 1600 looks like it will happen and that is normal for the market to go down that much and go up again to continue the long term trend. If she is right, that is a 20 percent sell off from the top and we are about half way there right now. Most experts agree a recession is not in the near future, so SPX 1600 and up again is realistic. What matters is how you want to be invested. Most big brokerage firms say to use proper asset allocation and stay the course. However, Morgan Stanley just sent out an email to to consider your investment and to reduce risk by ensuring you are holding less volatile stocks and to consider Consumer Staples stocks or companies that pay solid dividends. It seems like more companies think the market will go lower. The thing that bothers me is that nobody knows the bottom. There is long term support at SPX 1600. I just hope it doesn't go any lower than that.

lizap · Feb 6, 2016

The major indicies have held up reasonably well relative to some stocks. Index investing has been widely touted in recent years. I read recently where some market experts believe this will be a stock pickers market and the indices will take a beating... I hope SPX 1600 holds, but as I noted earlier, this market is very risky right now, negative interest rates in Japan, slowing in China, uncertainty in U.S, plus one of the longest bull markets ever.. all bull markets eventually end.

tompalm said:
Mary Ann Bartels, Cheif Investment Officer from Merrill Lynch was on CNBC today saying this is a bull market that will continue and to stay the course. She is known as a technical analysis expert and asked about where the market is going. She replied that SPX 1600 looks like it will happen and that is normal for the market to go down that much and go up again to continue the long term trend. If she is right, that is a 20 percent sell off from the top and we are about half way there right now. Most experts agree a recession is not in the near future, so SPX 1600 and up again is realistic. What matters is how you want to be invested. Most big brokerage firms say to use proper asset allocation and stay the course. However, Morgan Stanley just sent out an email to to consider your investment and to reduce risk by ensuring you are holding less volatile stocks and to consider consider Consumer Staples stocks or companies that pay solid dividends. It seems like more companies think the market will go lower. The thing that bothers me is that nobody knows the bottom. There is long term support at SPX 1600. I just hope it doesn't go any lower than that.

bogey21 · Feb 6, 2016

I manage my kids IRAs as I am the one who funded them. I got them 100% out of the stock market in October 2014 and moved them into a low duration bond fund. The fund I use when they are in stocks is a Small Cap Growth Fund. On January 8th I moved 10% of their money into it. On February 5th I moved another 10%. When the market drops another 10% or so I will move another 10% back into stocks. So far, so good!

George

tompalm · Feb 6, 2016

lizap said:
The major indicies have held up reasonably well relative to some stocks. Index investing has been widely touted in recent years. I read recently where some market experts believe this will be a stock pickers market and the indices will take a beating... I hope SPX 1600 holds, but as I noted earlier, this market is very risky right now, negative interest rates in Japan, slowing in China, uncertainty in U.S, plus one of the longest bull markets ever.. all bull markets eventually end.

Agree, and I don't want to run around saying the sky is falling because news can change everything and all the Fed has to do is say no more interest rate hikes and the market will rally. But long term indicators like monthly candles or monthly MACD, or monthly PMO crossovers just happened earlier this year around June and that has only happened twice in the last 20 years that was in 2000 and 2008. Both of those times, the index sold off 50 percent. So if history repeats itself, the selloff will be worse than SPX 1600. But, nobody knows the bottom.

PigsDad · Feb 6, 2016

lizap said:
I'll never forget, about 10 years ago, I helped a friend with her taxes who had worked at AT&T and had bought stock (there were countless stock splits) and had the dividends reinvested. It was the biggest nightmare. Never did get the cost basis right; surprised she never got audited by the IRS. Not for me, in my latter years...

You do realize that brokerages are now required to track and report (via 1099s) all cost basis information, right? This does not cover older purchases, but for any new purchases within the last couple years the burden falls on the brokerage company, not the individual to report cost basis (and that cost basis is reported to the IRS, so less "fudging").

Kurt

CO skier · Feb 6, 2016

tompalm said:
Agree, and I don't want to run around saying the sky is falling because news can change everything and all the Fed has to do is say no more interest rate hikes and the market will rally. But long term indicators like monthly candles or monthly MACD, or monthly PMO crossovers just happened earlier this year around June and that has only happened twice in the last 20 years that was in 2000 and 2008. Both of those times, the index sold off 50 percent. So if history repeats itself, the selloff will be worse than SPX 1600. But, nobody knows the bottom.

Somehow, the corporate bond world figures it out first. By the middle of last year, it was looking like corporate bonds had peaked, and it was obvious by the fall. I will continue watching corporate bonds, because they turned up in December 2008 -- a few months before the stock market did.

Meanwhile, there are bear market rallies, and this market is looking short-term oversold, so I am looking for some bargains to hold short-term. I followed-up the Cisco Systems idea with a tactical purchase yesterday and will be watching the daily Moving Average Convergence Divergence to determine when to sell it. My mental stop loss for any stock purchase is usually in the 11-13% range. If the market continues to head south and takes Cisco with it, I will sell it, because I was wrong. If the market stair steps down from these oversold conditions, I might give a little more leeway to 15%, because then I wasn't wrong, just early.

I would not attempt this trading strategy in a taxable account, because the government skim is too high.

The most important idea in any investment plan is to know and manage the risk, not manage the return. There is no question the market is riskier now than for the past few years, but the volatility is creating some compensatory rewards.

Sugarcubesea · Feb 6, 2016

I'm retiring in 12 to 13 years and I'm trying to figure out what to put my 401K in, so far over the past 8 months I've lost 10%…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me

Sugarcubesea · Feb 6, 2016

mpumilia said:
I am doing monthly contributions to a blue chip fund since last year in my Roth, I have 5 years until I retire.

What is a good blue chip fund

tompalm · Feb 6, 2016

Sugarcubesea said:
I'm retiring in 12 to 13 years and I'm trying to figure out what to put my 401K in, so far over the past 8 months I've lost 10%…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me

I like target funds if you want to take less risk. If your 401k doesn't offer any, put about 40 percent into a short term bond fund that has an average term of five years. Your other fund should be something with low risk like equity income fund. I like ARYIX if that is available to you.

A better option is to look at Sector Surfer and follow the recommendations from that. They just went to cash a few days ago. So if you don't mind trading a couple times each year, set up a strategy in Sector Surfer using the different funds in your 401k. Here is a link.

http://www.sumgrowth.com/MyPages/Strategies2.aspx

tompalm · Feb 6, 2016

Sugarcubesea said:
What is a good blue chip fund

TWEIX should do well. It is a five star fund.

Sugarcubesea · Feb 6, 2016

tompalm said:
I like target funds if you want to take less risk. If your 401k doesn't offer any, put about 40 percent into a short term bond fund that has an average term of five years. Your other fund should be something with low risk like equity income fund. I like ARYIX if that is available to you.

A better option is to look at Sector Surfer and follow the recommendations from that. They just went to cash a few days ago. So if you don't mind trading a couple times each year, set up a strategy in Sector Surfer using the different funds in your 401k. Here is a link.

http://www.sumgrowth.com/MyPages/Strategies2.aspx

Thank you, they do offer a retirement target fund, I put an allocation in the 2025 and the 2030… Thanks for the link

Sugarcubesea · Feb 6, 2016

I went to Morningstar, an this one PRWCX-CAPITAL APPRECIATION FUND is rated Gold, I'm going to put about 20% of my 401K in this one

lizap · Feb 6, 2016

A large portion of our pre-retirement portfolio is in PRWCX, unfortunately it is closed to new investors. I would go with something like Vanguard Wellington.

bogey21 · Feb 6, 2016

Sugarcubesea said:
I'm retiring in 12 to 13 years and I'm trying to figure out what to put my 401K in, so far over the past 8 months I've lost 10%…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me

I haven't looked into these in any great detail as I am already retired and living on my pension and Social Security (both annuities) but one of the things I would look at with a portion of your 401k are deferred annuities, those kicking in at ages like 75, 80 or 85. I see potential in having these to protect against depleting one's portfolio.

George

WinniWoman · Feb 6, 2016

Sugarcubesea said:
What is a good blue chip fund

I am doing Price Blue Chip. I also have Price Capital Appreciation.

lizap · Feb 8, 2016

Market down almost 400 pts. I think we're headed much lower...

johnrsrq · Feb 8, 2016

looking for support area- keep looking

no exhaustion in selling. further weakness,where's all that sideline cash

For those that appear to like "sales" in stock prices, there's discounts from retail value abound. Investco's Aristocat's UIT's have companies that increase dividends for each year of the last 25 yrs- without, of course ongoing mgmt. fee, as it is a unit investment trust (UIT) for those liking diversified quality dividend portfolio's. I can mention this as a retail person at this point.
[/B]Not investment advice, seek professional who can but also get educated in filed corp. cash flow and earning statements.

IBM approaching 52 week low and going back just 5 yrs- flat including dividends. 10 yrs a bit better. BRK-A takes private- lol. like BRK-A more now.

lizap · Feb 8, 2016

Bank and oil stocks down significantly. World markets pricing in a global slowdown/recession. Think any more interest rate increases can probably be ruled out anytime soon..

johnrsrq said:
no exhaustion in selling. further weakness,where's all that sideline cash

For those that appear to like "sales" in stock prices, there's discounts from retail value abound. Investco's Aristocat's UIT's have companies that increase dividends for each year of the last 25 yrs- without, of course ongoing mgmt. fee, as it is a unit investment trust (UIT) for those liking diversified quality dividend portfolio's. I can mention this as a retail person at this point.
[/B]Not investment advice, seek professional who can but also get educated in filed corp. cash flow and earning statements.

IBM approaching 52 week low and going back just 5 yrs- flat including dividends. 10 yrs a bit better. BRK-A takes private- lol. like BRK-A more now.

geekette · Feb 8, 2016

lizap said:
At this stage of my life (pre-retirement), I'm not interested in keeping up with things like dividend distributions and cost basis. I want simplicity. When we retire, we plan to annuitize (immediate annuity) half of our portfolio and place all but enough for an emergency fund in a balanced portfolio of mutual funds (all retirement funds), withdrawing 4% a year. I'll never forget, about 10 years ago, I helped a friend with her taxes who had worked at AT&T and had bought stock (there were countless stock splits) and had the dividends reinvested. It was the biggest nightmare. Never did get the cost basis right; surprised she never got audited by the IRS. Not for me, in my latter years...

While I never found the math to be daunting (but note that I make my career in oceans of data), brokers are now required to report cost basis.

Besides, from taxable portfolio, I don't sell, just collect dividends. 1099 shows up. easy.

Even if I owned a company taxable for 40 years, it's only 4 records a year, not unmanageable math and Excel will do it for you. I find it advantageous to have many lots to choose from in case I ever do want to sell since I can somewhat control my gain/loss by which lots I elect to sell.

Divs from a tax shelter have no basis that IRS cares about. Having those sent directly to my checking account makes it even easier and still no sell decisions, just collect.

Talent312 · Feb 8, 2016

Sugarcubesea said:
…I think I need to be more in bonds then stock at this point….How do you decide its so darn confusing to me

For a bonds/stock ratio, I use this formula: "age" - 10 = 'x' % in bonds.
So that means, if I'm 60, I should be 50% in bonds (and I am).

But what bonds?
In rising rate eras, old bonds lose value as new higher-rate bonds are issued.
So, your bond funds will suffer -- longer term funds suffer the most.
I prefer individual bonds. At least they pay you their face value at maturity.
The trick is to get a decent yield-to-maturity for safer bonds. Not easy to do.
.
.

CO skier · Feb 8, 2016

johnrsrq said:
no exhaustion in selling. further weakness,where's all that sideline cash

Quite a number of quality, beaten down stocks closed in the green today while "the markets" closed off more than 1%. There are a few bargain hunters returning to the market who may be enough to create a short term bounce.

There is no way I would tie up any money in a mutual fund at this point, but multi-month volatility is a trader's bread and butter -- trading in both directions.

johnrsrq · Feb 8, 2016

CO skier said:
Quite a number of quality, beaten down stocks closed in the green today while "the markets" closed off more than 1%. There are a few bargain hunters returning to the market who may be enough to create a short term bounce.

There is no way I would tie up any money in a mutual fund at this point, but multi-month volatility is a trader's bread and butter -- trading in both directions.

It's is not a mutual fund, UIT, subject to inflows/outflows (effects and expenses) and managerial portfolio roll and other actions but if those quality stocks that increased dividends for each of at least the last 25 yrs. with an instant diversification is worse than picking winners yourself, then go for that. But I was speaking of dividend structure of a retirement portfolio.

The larger the purchase the lower, if any, the small fee. Cheaper than buying them all and getting involved with emotions. Long track records at cost. No guarantees though. Past performance no guarantee of future results.

Maybe AAPL is worth nibbling with overweighting.

CO skier · Feb 8, 2016

johnrsrq said:
It's is not a mutual fund, UIT, subject to inflows/outflows (effects and expenses) and managerial portfolio roll and other actions but if those quality stocks that increased dividends for each of at least the last 25 yrs. with an instant diversification is worse than picking winners yourself, then go for that. But I was speaking of dividend structure of a retirement portfolio.

The larger the purchase the lower, if any, the small fee. Cheaper than buying them all and getting involved with emotions. Long track records at cost. No guarantees though. Past performance no guarantee of future results.

Maybe AAPL is worth nibbling with overweighting.

The "I wouldn't invest money in a mutual fund at this point" was directed at other posts where people were considering investing in a mutual fund during this sell-off. Sorry, I probably should have posted that separately or at least quoted one of the mutual fund posts.

AAPL will probably be setting new highs two years from now, but if "the market" keeps heading downward, AAPL will suffer undo amounts of selling, but then it will really be a screaming bargain. It just depends on how much of a roller coaster ride investors can tolerate if large investors (hedge funds and mutual funds portfolio managers) decide to bail and send the markets indiscriminately lower ala 2008.

CO skier · Feb 10, 2016

Akami Technologies was up over 20% today with an earnings report that surprised to the upside.

Cisco Systems traded up 5-8% during after hours due to an earnings report that met reduced expectations. It will be interesting to see what kind of gains it can hold during the regular session tomorrow.

Stock futures are currently down 3/4%.

For mutual fund investors it is a "stock market." For self directed investors, it is a market of individual stocks.

johnrsrq · Feb 11, 2016

rough day implied

futures looking very weak yet exhaustion still not at hand. still complacent.

T is holding well with it's fat dividend and subscriber prepaid addon with its cricket unit, the metrics appear solid but the revenue per sub. will be declining. I don't like tmus as such.

IBM a teenager again. again "on sale" looking for support or reaction low. dividend review possible.

good luck all.

glad my annuity offerings are safe.

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