[2020] A little stock market sense

[RENTER]

For those are listening to those who like a 60/40 plan, I am not going to tell you that is bad advice. Because it is not especially if you are not willing to put in the 5 minutes a day, rebalancing (NOT MARKET TIMING) your account like I do.

But it is not safe proof as people claim. Yesterday I pointed out that like the index 500, all 11 sectors of the 500 fell and that 7 of the 11 did better then the 500 index. I also pointed out how half of my Treasury ETF's fell.

But I did not mention corporate bonds because I do not use them except for a high yield which has a bull and bear. Treasuries provide me better protection and I have rising rate Treasury funds that went up yesterday.

So, I was curious how corporate bonds did yesterday. I knew the answer before looking. This is what I found.
SPIB down 0.24%
USIG down 0.34%
IGIB down 0.27%
SPBO down 0.35%
SUSC down 0.35%

So, a 60/40 will not protect you in a crash especially if your luck in life ends and a disaster requires you to take out the money at a loss. But in the long run if your luck holds and you can ride out a crash, you will be ok.

 

[letsgobobby]

For those are listening to those who like a 60/40 plan, I am not going to tell you that is bad advice. Because it is not especially if you are not willing to put in the 5 minutes a day, rebalancing (NOT MARKET TIMING) your account like I do.

But it is not safe proof as people claim. Yesterday I pointed out that like the index 500, all 11 sectors of the 500 fell and that 7 of the 11 did better then the 500 index. I also pointed out how half of my Treasury ETF's fell.

But I did not mention corporate bonds because I do not use them except for a high yield which has a bull and bear. Treasuries provide me better protection and I have rising rate Treasury funds that went up yesterday.

So, I was curious how corporate bonds did yesterday. I knew the answer before looking. This is what I found.
SPIB down 0.24%
USIG down 0.34%
IGIB down 0.27%
SPBO down 0.35%
SUSC down 0.35%

So, a 60/40 will not protect you in a crash especially if your luck in life ends and a disaster requires you to take out the money at a loss. But in the long run if your luck holds and you can ride out a crash, you will be ok.

why do you think buying and selling will protect you in a crash ?

 

[RENTER]

why do you think buying and selling will protect you in a crash ?

Because my buying and selling keeps me at 50/50 bull vs bear and not a 50/50 stock vs bond. A 50/50 or 60/40 stock vs bond will still fall and maybe by 30%.

My bears will soar while my bulls will not. The dividends and interest I earn will allow me to buy the falling bulls. The gains from my bears will allow me to buy the falling bulls.

Market timing is guessing the top and bottom of the market which I do not do. I play catch the falling knifes and keep buying until the market turns around because I will always have winners to buy the losers. Since I mainly buy the sectors, my losers will always come back and if they don't we are all dead anyway because that is the reason so many stocks will never return.

With 50/50 I have gains in both a bull and bear market by giving up big gains in a bull market for little gains while having little gains in a bear market. Thus producing an average between 10 and 11% over a BULL AND BEAR CYCLE. While I am still standing after a crash, those who dropped 50% will need a 100% return to get to even.

So, I am not giving up any long-term return unless I want to gamble and put it all on few stocks which would be a cold day in hell before I do that. Many who do, do beat me badly in the short term. But success goes to their heads and get greedy wanting more and do not want to sell to pay taxes if it is a non-retirement account. So they hang on to long and get clobbered.

In the meantime with a 50/50, I can play the tax loss harvesting game. Because I will always have losers.