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I decided last month to dip my toe (actually foot, leg...well my o.k. my waist) into the Miners (USAGX). I am purely "dating" this mutual fund at this point. I do hold VGPMX as a long term investment which hasn't had as much blood letting being a bit more diversified than a pure miner's fund. I am using a Midcap Index fund as the funding source for USAGX. In a sense, I am taking some of this year's profits (from USMIX) and buying (a speculation) in USAGX, hoping for some positive volatility from USAGX.
Some rules I am trying to adhere to with the USMIX / USAGX "portfolio": - I will give it a short downside leash (I started the position willing to lose 10 % and will maintain this 10 % trigger). - I will take any profits (upside movement) of 2 % or more and exchange back into USMIX. - I will buy shares of USAGX on down days of 2 % or more using USMIX as a funding source (exchange) equal to the daily percentage difference between these two funds.
I use GDX and IWM as a way of tracking USAGX and USMIX intraday. So far I have not had any short term redemption (trading) fees on these exchanges.
1 month performance has been positive.
- 8% for USAGX without exchanges - 8.9% on a "portfolio" of USMIX / USAGX (50% / 50% mix) with periodic exchanges (buys and sells) - This "mini portfolio" equates to 5% of my overall portfolio
Let see what the New Year brings.
Anyone dating (speculating) with other sectors (EM, Japan, Latin America, Bonds)?
Here's a three month ride with USAGX...not for the faint of heart:
Reply to @bee: I am currently on the other side with a position in GLL and have not been stopped out yet but bleeding from this week. The trend hasn't reversed yet and it remains to be seen whether this time is different from the dead cat bounces in gold and miners in mid Sept and Mid October. From a TA perspective for me, that would take an uptrend in both 20day and 50day moving averages with the 20 day crossing over and the price breaking over that to see a long side possibility. That could happen for USAGX above 14 but right now technicals don't look encouraging. But then there is no guarantee either way. Good that you have a stop loss criterion.
Reply to @cman: Volitality is where money is made and lost especially in short time intervals. As far as TA goes... I try to keep it simple. For me, I want to know if USAGX is making lower-lows ( a downward momentum signal) or higher-lows (an upward momentum signal). Using at least a 20 mda holding period (roughly a month's time) here how USAGX has performed, lower-lows (red periods) and higher-lows (green periods) over the last year.
USAGX over the last month (most recent 20 mda) is exhibiting higher-lows "more or less"...watching this closely.
On your side of the trade there is also DUST which is a 3X short on miners.
Here's DUST charted with GLL and GLD over the last 3 month:
Reply to @bee: Good luck to you Bee. You could be a big winner with USAGX. It's good you applied rules to trades.
But, not for me... As I get closer to retirement, I decided contrarian bets like PM's are not my cup of tea. I would rather put small bets on sectors that have already started to give positive return, momentum investing. I did that with health care, PRHSX, and started buying global technology the last couple months, PRGTX.
Reply to @MikeM: As I mentioned above, this is a small position that I may "get stopped out of". Commodities, EM bonds, Real Estate, as well as Miners have some downside risk priced into their shares.
I like your choices at TRP. Many of T Rowe Price funds have been my best risk adjusted return funds I own. I own PRHSX, PRIDX, PRJPX, PRMTX, PRNHX, and PRWCX (where profits from these other funds).
Reply to @bee: You appear to be a much shorter-term trader than I am and so these bets may work for you. Hope they do, I am all for people making money. But if it is just small positions that don't make a difference one way or another, then it really doesn't matter much and makes people feel good when it works and helps people forget it when it doesn't. But that won't work for significant investing or leveraged investments.
I haven't heard anyone else say volatility is where you make money unless they were trading VIX long/short, front-running trades or collecting trading fees. Everyone else seems to lose money with volatility. This is why I keep away from 3x funds or even highly volatile 2x funds. The higher the volatility, the more frequent the trading needed to play the wiggles and more you have to be right about the bet. But everyone finds a compromise that fits their resources and time and you appear to have found yours. Hope the trades work out.
I am more with @MikeM on this in trying to catch momentums after there are signs rather than try to anticipate inflection points. The difference with him might be I play both long and short sides of the moves with leveraged instruments that may require more frequent trading than him, so it is all relative. This type of trading requires very different signals than the one you are using for yourself.
Reply to @cman: The amount, though small, is one of many Roth conversion accounts I've set up as a potential for a Roth conversion for TY2014. I have a number of small Roth conversion accounts that may either be recharacterized or converted depending on the performance of the account. These are agressive bets that won't all work out. I will recharacterize the (particular bet) that don't work out or I will convert the account to permanent Roth status if it does.
This is just an investment strategy I am incorporating between now and when I turn 70.5 when I can no longer convert IRA money to Roth money. These Roth conversion accounts average about $5K. I will pay taxes on these accounts so long as during the recharacterization period any have appreciated enough to cover taxes on this conversion. My tax bracket averages around 20% so I need this account to appreciate to $6K before the recharacterization period ends. If this "bet" falls short, I will return this investment back to self direct IRA status until next year.
But as you say...all this doesn't matter much in the small world in which I dwell.
Comments
Some rules I am trying to adhere to with the USMIX / USAGX "portfolio":
- I will give it a short downside leash (I started the position willing to lose 10 % and will maintain this 10 % trigger).
- I will take any profits (upside movement) of 2 % or more and exchange back into USMIX.
- I will buy shares of USAGX on down days of 2 % or more using USMIX as a funding source (exchange) equal to the daily percentage difference between these two funds.
I use GDX and IWM as a way of tracking USAGX and USMIX intraday. So far I have not had any short term redemption (trading) fees on these exchanges.
1 month performance has been positive.
- 8% for USAGX without exchanges
- 8.9% on a "portfolio" of USMIX / USAGX (50% / 50% mix) with periodic exchanges (buys and sells)
- This "mini portfolio" equates to 5% of my overall portfolio
Let see what the New Year brings.
Anyone dating (speculating) with other sectors (EM, Japan, Latin America, Bonds)?
Here's a three month ride with USAGX...not for the faint of heart:
USAGX over the last month (most recent 20 mda) is exhibiting higher-lows "more or less"...watching this closely.
On your side of the trade there is also DUST which is a 3X short on miners.
Here's DUST charted with GLL and GLD over the last 3 month:
But, not for me... As I get closer to retirement, I decided contrarian bets like PM's are not my cup of tea. I would rather put small bets on sectors that have already started to give positive return, momentum investing. I did that with health care, PRHSX, and started buying global technology the last couple months, PRGTX.
Hope you win!
I like your choices at TRP. Many of T Rowe Price funds have been my best risk adjusted return funds I own. I own PRHSX, PRIDX, PRJPX, PRMTX, PRNHX, and PRWCX (where profits from these other funds).
I haven't heard anyone else say volatility is where you make money unless they were trading VIX long/short, front-running trades or collecting trading fees. Everyone else seems to lose money with volatility. This is why I keep away from 3x funds or even highly volatile 2x funds. The higher the volatility, the more frequent the trading needed to play the wiggles and more you have to be right about the bet. But everyone finds a compromise that fits their resources and time and you appear to have found yours. Hope the trades work out.
I am more with @MikeM on this in trying to catch momentums after there are signs rather than try to anticipate inflection points. The difference with him might be I play both long and short sides of the moves with leveraged instruments that may require more frequent trading than him, so it is all relative. This type of trading requires very different signals than the one you are using for yourself.
This is just an investment strategy I am incorporating between now and when I turn 70.5 when I can no longer convert IRA money to Roth money. These Roth conversion accounts average about $5K. I will pay taxes on these accounts so long as during the recharacterization period any have appreciated enough to cover taxes on this conversion. My tax bracket averages around 20% so I need this account to appreciate to $6K before the recharacterization period ends. If this "bet" falls short, I will return this investment back to self direct IRA status until next year.
But as you say...all this doesn't matter much in the small world in which I dwell.