Tool for knowing when to buy/sell?

benbay001

Type_45 said:

Ie, sell your shares when the market is below the 200 day, and buy again when the market goes above.

Umm, sell low, buy high?

quirkydeptless

These tools might be handy for the coming Zombie Company Apocalypse...

HansOndabush

You can use technical analysis but nearly all the indicators are lagging which means you wont get in/out at the best price but may predict a larger longer term move. This worked well recently with bitcoin where the neckline on the head and shoulders pattern broke predicting the rapid drop to 30K (dollars).

Type_45

quirkydeptless said:

These tools might be handy for the coming Zombie Company Apocalypse...

I have made a start on my zombie apocalypse supplies. It's all cheap (the food is Asda Smart Price, mostly). I'd recommend it!

Type_45

bostonerimus said:

Type_45 said:

bostonerimus said:

Type_45 said:

coastline said:

Tools can help but if the magic tool was out there everybody would use it. Moving averages are better used for topping up with spare cash not these 50 and 200 day crossover methods. Look at the link the 50 in blue crosses over the 200 in red right at the bottom of the correction in March to give a sell and doesn't give a buy signal until July. Hopeless. !! 
Much better off adding spare cash at the 50 day average or if the index is near the 200 top up there. Nothing perfect about this either. Institutions used to top up at the 200 day years ago.
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What can be used as an alert is the distance between the 200 day average and the index itself. Today this is the situation and it's more than likely to correct but who knows when. ? It's been over extended for weeks now.
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There's dozens of indicators on charting packages out there for free and even on your brokers website. Most are used for determining overbought and oversold conditions in short and long term timeframes. Again today looking at this link you can see RSI MACD and Stoc all extended but can stay extended until the index drops. Still there is uses for them just a case of what you want them for. 
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The article doesn't mention the 50 day. Only the 200 day.

If you look only at the index and the 200 then it does seem to be quite accurate as a sell signal?

Perhaps less accurate as a buy signal, as by that time a lot of upside has been missed out on.

My buy signal was always when I got my pay check and rebalancing when I diverged from my set asset allocation, but I think the rebalancing wasn't  that useful. You are really only financially independent when you actually stop worrying about money and the sooner you do that the better.

You think what's going on is sustainable?

Zombie companies, printing money which is inflating house prices and stocks, millions of people on furlough...

If you're invested in the stock market, and you aren't worried, then good luck to you.

I have a high tolerance to risk. But I'm seriously considering going into cash (within my ISA) until I figure out what to invest in. (I'm currently in VLS100).

Your trepidation says that you are invested with too much risk. If you can't deal with a 20% to 50% drop in value if you are 100% equities then you need to change your asset allocation. Going 100% cash might be a good move, but it also might cause you to miss out on future gains and you will have to time your re-entry into the market. Drastic swings in your asset allocation are rarely a good thing. Come up with a cash, stock, and bond allocation that you can live with through ups and downs and that historical statistics suggest will get you to where you want to be. All we have is history, speculation and waving a finger in the air don't usually work well.

I think you're right regarding my need to come up with a bond/stock/cash allocation I'm comfortable with. 

I'm not comfortable with VLS100 in today's climate, and I have all my £75k savings in it (within an iWeb ISA). 

I will have a think today about the split I'd be comfortable with. 

Quick question: let's say, for example, I split my £75k into: £30k stocks, £25k bonds, £20k cash and keep that all within my ISA.... Is there any way of making money/interest on the £20k cash? Or would it simply be sitting there not earning anything waiting to buy stock/bonds when the market does crash?

jeelz

Quick question: let's say, for example, I split my £75k into: £30k stocks, £25k bonds, £20k cash and keep that all within my ISA.... Is there any way of making money/interest on the £20k cash? Or would it simply be sitting there not earning anything waiting to buy stock/bonds when the market does crash?

As Interactive Investment don’t pay any interest on cash your money would be sitting doing nothing. Furthermore as their ISA isn’t flexible you can’t withdraw your cash without losing your tax free status. 

You could for example transfer your VLS 100 ISA to Vanguard (their ISA is flexible) change down to VLS 60 to give you an equity/bond ratio closer to the one you suggest then withdraw your £20,000 cash and stick it into premium bonds (or whatever) till next March when it would need to be returned to your ISA to keep it in it’s ISA wrapper. Rinse and repeat each tax year.

Thrugelmir

While the days of a 60/40 portfolio may not be over, the historic allocation is best described as being in "critical care".  Government bonds no longer fulfill the purpose they once did. 

Type_45

Thrugelmir said:

While the days of a 60/40 portfolio may not be over, the historic allocation is best described as being in "critical care".  Government bonds no longer fulfill the purpose they once did. 

VLS60 only has 5.41% of UK government bonds. 

I don't know how good the remaining 34.59% of the bonds are, however?

If the 60/40 split is no longer as fashionable, what's the alternative method?

Grumpy_chap

Type_45 said:

I found this an interesting article. It's advice is to use the 200 day moving average as a trigger to buy or sell shares ahead of crashes and recoveries.

Ie, sell your shares when the market is below the 200 day, and buy again when the market goes above.

This wouldn't have worked, says the article, in 1987 when there was little or no notice before the crash.

Thoughts? 

https://www.marketwatch.com/story/really-the-market-will-collapse-by-end-of-june-11619199491

Well, this idea "sell low - buy high" certainly bucks conventional wisdon.

Just out of interest, if I have a tool to tell me reliably when to buy and sell stocks, would I:
A - use the tool to make loads of money?
B - write an article on how wonderful my tool is and paste it all over the internet?

Bobziz

Type_45 said:

Thrugelmir said:

While the days of a 60/40 portfolio may not be over, the historic allocation is best described as being in "critical care".  Government bonds no longer fulfill the purpose they once did. 

VLS60 only has 5.41% of UK government bonds. 

I don't know how good the remaining 34.59% of the bonds are, however?

If the 60/40 split is no longer as fashionable, what's the alternative method?

Wealth preservation funds ?