I'm timing the market - who's in?

adindas

I do not hold this Investment trust so have not looked into the chart analysing the Price/volume action in much detail. But the NAV value for CTY is 405.79p. The current price is already exceed the NAV value.

The resistance level of this stock indeed around 425p. If they manage to break that resistance level they will go much higher and forming a new support. RSI is almost in  the overbought territory, while MACD has formed a golden cross. Also volume bar is showing there are a lot of buying is currently going on as shown below 

sevenhills

bd10 said:

NedS said:

I know, everyone here hates people timing the market - it's time in the market that counts.

I have a healthy holding in City of London Investment Trust (CTY) in my SIPP - 17,000 shares to be precise. I'd like to increase that holding, to around 20,000 shares (+17.65%) but I'd rather not pay out £12,600 for those extra 3000 shares.

For a bit of fun, I'm going to try to achieve that this year (2023) by timing the market - selling some or all of the holding and buying back after market falls (volatility is your friend). If I achieve my goal, I will add 17.65% in value in addition to any natural gains/losses and dividends (I will account for any lost dividend income). Follow along if you are interest, or ignore if you are not.

My strategy is simple - CTY basically trades within a range, Covid aside, pretty much 375-440p in the last 8 years so it should be relatively straight forward to trade. I will look to reduce the holding towards the upper end of that range and look to buy back lower judging what I think market sentiment is at the time. I am not taking a long term view other than I'm happy to hold CTY for the long term as part of my retirement strategy.

So lets see how we get on:

5/1/2023: 1st trade - sold 7000 shares at 420.6868p today. Hold 10,000 shares and banked £29,435.13 after fees.

Plan to sell the remaining 10,000 on further price increases (looking for ~425p) or buy back lower using the banked £29k. I'm confident that markets will be lower than they are now at some point in the next 3 months although I'm mindful the next ex-dividend date is 26/1/2023.

Nothing wrong with timing. Am doing the same, but for phasing in from cash back into risk.

Out of curiosity, how many trades would you be expecting to do this year? All else being equal, transaction costs would be my concern: 50bp stamp duty, commission, bid/ask spread all adds up quite quickly and that might exceed the savings you were hoping to achieve.

Apart from that, good luck and fingers x'ed!

I was thinking shares vary widely, but this is a trust. Are dealing charges lower?
I have thought about doing this with shares, but I would need to put all of my money into one company. I always buy and sell after rises and falls, sometimes it works.

NedS

bd10 said:

NedS said:

I know, everyone here hates people timing the market - it's time in the market that counts.

I have a healthy holding in City of London Investment Trust (CTY) in my SIPP - 17,000 shares to be precise. I'd like to increase that holding, to around 20,000 shares (+17.65%) but I'd rather not pay out £12,600 for those extra 3000 shares.

For a bit of fun, I'm going to try to achieve that this year (2023) by timing the market - selling some or all of the holding and buying back after market falls (volatility is your friend). If I achieve my goal, I will add 17.65% in value in addition to any natural gains/losses and dividends (I will account for any lost dividend income). Follow along if you are interest, or ignore if you are not.

My strategy is simple - CTY basically trades within a range, Covid aside, pretty much 375-440p in the last 8 years so it should be relatively straight forward to trade. I will look to reduce the holding towards the upper end of that range and look to buy back lower judging what I think market sentiment is at the time. I am not taking a long term view other than I'm happy to hold CTY for the long term as part of my retirement strategy.

So lets see how we get on:

5/1/2023: 1st trade - sold 7000 shares at 420.6868p today. Hold 10,000 shares and banked £29,435.13 after fees.

Plan to sell the remaining 10,000 on further price increases (looking for ~425p) or buy back lower using the banked £29k. I'm confident that markets will be lower than they are now at some point in the next 3 months although I'm mindful the next ex-dividend date is 26/1/2023.

Nothing wrong with timing. Am doing the same, but for phasing in from cash back into risk.

Out of curiosity, how many trades would you be expecting to do this year? All else being equal, transaction costs would be my concern: 50bp stamp duty, commission, bid/ask spread all adds up quite quickly and that might exceed the savings you were hoping to achieve.

Apart from that, good luck and fingers x'ed!

No fixed ideas about how many times to trade - just to try to exploit any opportunities that present themselves. Historically, looking back there are typically 3 or 4 good opportunities most years where there is a market pull back. Doesn't need to be huge - if I can capture 5% of a drop three times per year, then I've added significant value on an asset that otherwise ticks along yielding 5% in income. So a 10% market swing gives me plenty of scope, even allowing for spreads and fees, and CTY is broadly trading in a ~15% window the majority of the time.

Audaxer

sevenhills said:

bd10 said:

NedS said:

I know, everyone here hates people timing the market - it's time in the market that counts.

I have a healthy holding in City of London Investment Trust (CTY) in my SIPP - 17,000 shares to be precise. I'd like to increase that holding, to around 20,000 shares (+17.65%) but I'd rather not pay out £12,600 for those extra 3000 shares.

For a bit of fun, I'm going to try to achieve that this year (2023) by timing the market - selling some or all of the holding and buying back after market falls (volatility is your friend). If I achieve my goal, I will add 17.65% in value in addition to any natural gains/losses and dividends (I will account for any lost dividend income). Follow along if you are interest, or ignore if you are not.

My strategy is simple - CTY basically trades within a range, Covid aside, pretty much 375-440p in the last 8 years so it should be relatively straight forward to trade. I will look to reduce the holding towards the upper end of that range and look to buy back lower judging what I think market sentiment is at the time. I am not taking a long term view other than I'm happy to hold CTY for the long term as part of my retirement strategy.

So lets see how we get on:

5/1/2023: 1st trade - sold 7000 shares at 420.6868p today. Hold 10,000 shares and banked £29,435.13 after fees.

Plan to sell the remaining 10,000 on further price increases (looking for ~425p) or buy back lower using the banked £29k. I'm confident that markets will be lower than they are now at some point in the next 3 months although I'm mindful the next ex-dividend date is 26/1/2023.

Nothing wrong with timing. Am doing the same, but for phasing in from cash back into risk.

Out of curiosity, how many trades would you be expecting to do this year? All else being equal, transaction costs would be my concern: 50bp stamp duty, commission, bid/ask spread all adds up quite quickly and that might exceed the savings you were hoping to achieve.

Apart from that, good luck and fingers x'ed!

I was thinking shares vary widely, but this is a trust. Are dealing charges lower?
I have thought about doing this with shares, but I would need to put all of my money into one company. I always buy and sell after rises and falls, sometimes it works.

The dealing charges are the same because you are buying shares in the IT.

If what is proposed was that easy, everyone would be doing it. I would rather look for an opportunity to increase my holding if the share price falls significantly, but wouldn't sell my original holding for cash waiting for a big price fall.  The share price fell by about 35% in March 2020. I wish I had invested more in CTY and other falling investments at that time.

NedS

sevenhills said:

bd10 said:

NedS said:

I know, everyone here hates people timing the market - it's time in the market that counts.

I have a healthy holding in City of London Investment Trust (CTY) in my SIPP - 17,000 shares to be precise. I'd like to increase that holding, to around 20,000 shares (+17.65%) but I'd rather not pay out £12,600 for those extra 3000 shares.

For a bit of fun, I'm going to try to achieve that this year (2023) by timing the market - selling some or all of the holding and buying back after market falls (volatility is your friend). If I achieve my goal, I will add 17.65% in value in addition to any natural gains/losses and dividends (I will account for any lost dividend income). Follow along if you are interest, or ignore if you are not.

My strategy is simple - CTY basically trades within a range, Covid aside, pretty much 375-440p in the last 8 years so it should be relatively straight forward to trade. I will look to reduce the holding towards the upper end of that range and look to buy back lower judging what I think market sentiment is at the time. I am not taking a long term view other than I'm happy to hold CTY for the long term as part of my retirement strategy.

So lets see how we get on:

5/1/2023: 1st trade - sold 7000 shares at 420.6868p today. Hold 10,000 shares and banked £29,435.13 after fees.

Plan to sell the remaining 10,000 on further price increases (looking for ~425p) or buy back lower using the banked £29k. I'm confident that markets will be lower than they are now at some point in the next 3 months although I'm mindful the next ex-dividend date is 26/1/2023.

Nothing wrong with timing. Am doing the same, but for phasing in from cash back into risk.

Out of curiosity, how many trades would you be expecting to do this year? All else being equal, transaction costs would be my concern: 50bp stamp duty, commission, bid/ask spread all adds up quite quickly and that might exceed the savings you were hoping to achieve.

Apart from that, good luck and fingers x'ed!

I was thinking shares vary widely, but this is a trust. Are dealing charges lower?
I have thought about doing this with shares, but I would need to put all of my money into one company. I always buy and sell after rises and falls, sometimes it works.

Yes, it's a trust so there are diversification benefits, but unfortunately no exemption from stamp duty so I have to absorb that. You could achieve the same thing trading a FTSE100 ETF avoiding stamp duty as CTY performance will not really deviate in the short term.

For me, I'm looking to trade something that (a) I hold anyway, and (b) trades in a fairly predictable window so it's relatively easy to scale out of and back into at resistance levels. It's far easier to do that with an index (or diversified trust in this case) than with an individual company share (although I love buying L&G in a crisis and then taking profits), and easier with an index that broadly trades sideways (FTSE100) than one that's moving upwards or downwards (S&P500), although no reason not to trade the S&P500.

coastline

bd10 said:

NedS said:

I know, everyone here hates people timing the market - it's time in the market that counts.

I have a healthy holding in City of London Investment Trust (CTY) in my SIPP - 17,000 shares to be precise. I'd like to increase that holding, to around 20,000 shares (+17.65%) but I'd rather not pay out £12,600 for those extra 3000 shares.

For a bit of fun, I'm going to try to achieve that this year (2023) by timing the market - selling some or all of the holding and buying back after market falls (volatility is your friend). If I achieve my goal, I will add 17.65% in value in addition to any natural gains/losses and dividends (I will account for any lost dividend income). Follow along if you are interest, or ignore if you are not.

My strategy is simple - CTY basically trades within a range, Covid aside, pretty much 375-440p in the last 8 years so it should be relatively straight forward to trade. I will look to reduce the holding towards the upper end of that range and look to buy back lower judging what I think market sentiment is at the time. I am not taking a long term view other than I'm happy to hold CTY for the long term as part of my retirement strategy.

So lets see how we get on:

5/1/2023: 1st trade - sold 7000 shares at 420.6868p today. Hold 10,000 shares and banked £29,435.13 after fees.

Plan to sell the remaining 10,000 on further price increases (looking for ~425p) or buy back lower using the banked £29k. I'm confident that markets will be lower than they are now at some point in the next 3 months although I'm mindful the next ex-dividend date is 26/1/2023.

Nothing wrong with timing. Am doing the same, but for phasing in from cash back into risk.

Out of curiosity, how many trades would you be expecting to do this year? All else being equal, transaction costs would be my concern: 50bp stamp duty, commission, bid/ask spread all adds up quite quickly and that might exceed the savings you were hoping to achieve.

Apart from that, good luck and fingers x'ed!

At the end of the day there's nothing between CTY and the FTSE100 even the long term annualised returns are similar. FTSE 8.7% CTY 7.8%.

Chart Tool | Trustnet

With that in mind I trade the ETF tracker ISF.L . Broker charges £6 a go and the spread isn't worth considering really. CTY the orange line. Difference is more than likely dividend payments ? Use the same set up and indicators I've described in my earlier post.

iShares PLC iShares Core FTSE 100 UCITS ETF Dist, UK:ISF Advanced Chart - (LON) UK:ISF, iShares PLC iShares Core FTSE 100 UCITS ETF Dist Stock Price - BigCharts.com (marketwatch.com)

Linton

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

NedS

Linton said:

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

Interesting point, but little effect I suspect as the net result is that the trust SP performs close to NAV, and NAV performs close to it's constituent market (e.g, FTSE100) so in every practicable sense we are tracking/trading the FTSE100, which just like CTY broadly trades sideways in a window and pays a hefty dividend.

coastline

NedS said:

Linton said:

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

Interesting point, but little effect I suspect as the net result is that the trust SP performs close to NAV, and NAV performs close to it's constituent market (e.g, FTSE100) so in every practicable sense we are tracking/trading the FTSE100, which just like CTY broadly trades sideways in a window and pays a hefty dividend.

I agree CTY behaves like a closet tracker and there's very little between the two chart patterns over many years. Volatility creates opportunities to trade that's why I stick to my system . There's no predictions and no targets just trying to ride the waves. It's not day trading where you can easily get wiped out. Again not the best illustration below but those indicators at the extremes can produce respectable gains . In just 2 years there's dozens . Always another chance coming along. 

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

Posted this one before with the SP500 . SP500 stochastic is low but the FTSE is high. ?? I wonder ? US tend to run the show.

$SPX | SharpCharts | StockCharts.com

NedS

Yes, for me the S&P500 chart looks to be in a similar set up to early Sept 2022, and headed on it's next leg down to maybe below 3500. If it falls, the FTSE will not need much encouragement to follow it downwards. I do not see a huge amount of upside for the FTSE100 from current levels, hence my trade today to start reducing my holding. US earnings remain key during the next 3-6 months.