Tool for knowing when to buy/sell?

AnotherJoe

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

Its self-evidently rubbish.

1. If it was that simple, everyone would do it buying in at the exact time of those points.

2. If they did that, that would affect the markets and it would stop being true.

3. Irrespective of that, its pathetically simplistic and even massively complex algorithms run by some of the biggest computers cannot predict what will happen.

Type_45

AnotherJoe said:

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

Its self-evidently rubbish.

1. If it was that simple, everyone would do it buying in at the exact time of those points.

2. If they did that, that would affect the markets and it would stop being true.

3. Irrespective of that, its pathetically simplistic and even massively complex algorithms run by some of the biggest computers cannot predict what will happen.

Well, we don't need a massively complex algorithm from a big computer to see that we are heading for a crash now...
The Western economies are literally being held together with printed money.
Does debt mean nothing anymore? Is Modern Monetary Theory now a fact and is in full practice?

Because the alternative is that we are at the crossroads of a monetary reset. 

How this monetary reset affects the stock market I don't know... Maybe all the printed money will keep it growing as it has for the past 15 months. Or maybe it's about to melt down.

But either way, there is a lot of greed going on and markets are at ATHs.

Thrugelmir

Deleted_User said:

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?

 Thrugs just likes over-overcomplicating it. Which may be fine for him (it's a hobby), but don't feel you have to do it to.

I'm not suggesting or recommending anything. Merely highlighting the fact that one particular portfolio set-up that has worked well for a number of decades may have finally well and truly run out of road.  As a consequence investment returns may be considerably lower than people are expecting going forward.  Better to be forward looking and understand the potential risks. Than drive looking using the rear view mirror with a reliance on historical data to underpin ones viewpoint. 

Type_45

Thrugelmir said:

Deleted_User said:

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?

 Thrugs just likes over-overcomplicating it. Which may be fine for him (it's a hobby), but don't feel you have to do it to.

I'm not suggesting or recommending anything. Merely highlighting the fact that one particular portfolio set-up that has worked well for a number of decades may have finally well and truly run out of road.  As a consequence investment returns may be considerably lower than people are expecting going forward.  Better to be forward looking and understand the potential risks. Than drive looking using the rear view mirror with a reliance on historical data to underpin ones viewpoint. 

Ok, and you may well be correct. What are the alternatives to the traditional 60/40 equities/bonds split?

bostonerimus

Type_45 said:

AnotherJoe said:

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

Its self-evidently rubbish.

1. If it was that simple, everyone would do it buying in at the exact time of those points.

2. If they did that, that would affect the markets and it would stop being true.

3. Irrespective of that, its pathetically simplistic and even massively complex algorithms run by some of the biggest computers cannot predict what will happen.

Well, we don't need a massively complex algorithm from a big computer to see that we are heading for a crash now...
The Western economies are literally being held together with printed money.
Does debt mean nothing anymore? Is Modern Monetary Theory now a fact and is in full practice?

Because the alternative is that we are at the crossroads of a monetary reset. 

How this monetary reset affects the stock market I don't know... Maybe all the printed money will keep it growing as it has for the past 15 months. Or maybe it's about to melt down.

But either way, there is a lot of greed going on and markets are at ATHs.

A crash is always coming. Living within your means and being thrifty are a couple of things that you can do right now to help you to survive the next crash. Do those rather than trying to predict the crash or believing that you can work out how monetary policy affects macro-economics. Developing a cash/stock/bond allocation that lets you sleep at night and stops you from worrying about monetary policy is another thing you should do immediately. If you have a repayment mortgage extra payments are like putting money into a saving account yielding your mortgage interest rate and if you have any debt pay that off too. Zero debt, some cash in the bank and a thrifty lifestyle are always helpful to your finances - doubly so in a crash.

AnotherJoe

Type_45 said:

AnotherJoe said:

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

Its self-evidently rubbish.

1. If it was that simple, everyone would do it buying in at the exact time of those points.

2. If they did that, that would affect the markets and it would stop being true.

3. Irrespective of that, its pathetically simplistic and even massively complex algorithms run by some of the biggest computers cannot predict what will happen.

Well, we don't need a massively complex algorithm from a big computer to see that we are heading for a crash now...
The Western economies are literally being held together with printed money.
Does debt mean nothing anymore? Is Modern Monetary Theory now a fact and is in full practice?

Because the alternative is that we are at the crossroads of a monetary reset. 

How this monetary reset affects the stock market I don't know... Maybe all the printed money will keep it growing as it has for the past 15 months. Or maybe it's about to melt down.

But either way, there is a lot of greed going on and markets are at ATHs.

Have you put your money where your convictions are and started shorting?

Markets are often at ATH's.

Thats what happens when they go up.Which they have done, overall, for teh past whatever years.

The fact they are at an ATH is not a predictor of a crash.

I've found buy and hold seems to work in the long term and most of my failures have been failing to keep faith with why i bought a company.

 

Thrugelmir

Type_45 said:

Thrugelmir said:

Deleted_User said:

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?

 Thrugs just likes over-overcomplicating it. Which may be fine for him (it's a hobby), but don't feel you have to do it to.

I'm not suggesting or recommending anything. Merely highlighting the fact that one particular portfolio set-up that has worked well for a number of decades may have finally well and truly run out of road.  As a consequence investment returns may be considerably lower than people are expecting going forward.  Better to be forward looking and understand the potential risks. Than drive looking using the rear view mirror with a reliance on historical data to underpin ones viewpoint. 

Ok, and you may well be correct. What are the alternatives to the traditional 60/40 equities/bonds split?

The 60/40 split was born from research in the 50's when US investors only had access to two markets. US Equities and US Treasuries. Regarded as being an optimal diversified portfolio for risk adjusted returns. The large asset management groups adopted the benchmark and an entire industry was spawned. With the asset options available today to investors. Probably requires another rethink on what now constitutes an optimal portfolio. Modern Portfolio Theory needing an update some 70 years on. 

Type_45

So the UK can be £5tn in debt, and it makes no difference?

£10tn?
£20tn?

Where does it end?

What's the logical conclusion to never-ending debt, year on year?

eskbanker

Type_45 said:

What's the logical conclusion to never-ending debt, year on year?

An exponential proliferation in speculative posts about global financial 'resets' maybe?

steampowered

Type_45 said:

I'm approaching this as someone who thinks there will be a crash soon.

People like you have been warning of an imminent crash on these forums for years. 

I probably first read these forums in 2010. Back then people were warning of a crash due to legacy issues from 2008.
Then it was 2012, and people were warning of a crash due to the Eurozone issues.
Then it was 2014 and people were worried about global instability (this is the year that the passenger jet MH17 was shot down, probably by Russian backed militants, over Ukraine)
Then it was 2016 with Brexit and Trump. 
I forget why people were predicting a crash in 2018-2019 but I'm sure they were.
Then you had COVID in 2020.

 Your predictions of a crash will be correct eventually. But you could be waiting a very long time, and will be missing out on a lot of growth along the way.