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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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When to start buying

I will not start buying longer-term until I see the following:

When to buy Stocks? When the price will cross 100 days moving average.
SP500 (chart) from 2008 to 2009. See the 3 moving averages below. 100 MA(red line) is the best, not too early and not too late. For the current chart, use this (link).

When to buy CEFs? PCI(chart). Use weekly MACD and enter when it's positive.

When to buy Bond OEFs: PIMIX (chart). You want to see several weeks of uptrend

With my own money, I'm mostly in cash/MM since 2/28 and at 99+% in MM since March 09. Since 2/28 I mostly trade and back to MM. I don't recommend it to others. Just wait for the above for an entry.
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Comments

  • edited March 20
    Hi sir - thought maybe forming bottom past few days...thought we would get more upswing from today ... perhaps breakthrough at sp500 hovering around 2200 levels
    DOWS -18% For week

    When you see number deaths usa severely up and market still up/curve starting flattening, maybe good time to tiptoe in

    Energy and other sectors appear extremely cheap though
  • I have said this as part of my comments on2 or 3 threads.:Basicaly stock market news is no so relevant . Wait for good news on the health front.A solution isn't necessary but stories like a new drug is starting trials should encourage dipping in
  • Howdy folks,

    You start buying just after you projectile vomit all over your screen.

    Start window shopping now for the post virus world. Don't try to play the froth. Go after those that are winning in this nastiness.

    Just my plan,

    Rono
  • ...... Just trying think, for the moment, about some comparisons. This thing is unprecedented, yes? (Other than the bubonic plague?) The London Blitz:
    When in doubt, stop and make a cup of tea. Eventually, this thing will be behind us. Rono's words make sense. Can we see the light at the end of the tunnel, yet? Even if we can, do we know how long the tunnel is?
    https://d29k3dcgpah9r8.cloudfront.net/54d6c5deebacc0c815ef9f59aa29fc0d_500
    At some point, these days will be in the past. THEN, we can assert:
    "...Now, this is not the end. This is not even the beginning of the end. But it is, perhaps, the end of the beginning."


    There will truly need to be a response by the world's governments that is Marshall Plan-like, in order to recover. (That help was offered to uncle Joe Stalin The Terrible, but he refused it.) But the US is not pre-eminent, the way it was, right after The War. An emphasis on public welfare, not private profit, will need to happen. Like all of those alphabet-soup FDR programs. Let governments everywhere reclaim their purpose, SERVING THE PEOPLE. Then profits will follow. Because we'll never get rid of markets. Because they are useful, when REGULATED.
  • The day cases level out or start to go down...not before.
  • Monitor the investment accounts of all those in the senate intelligence committee. When they buy, you buy.
  • Hi FD1000, interesting article regarding sp500 maybe bottom by tom floyd/ (spy 50 days moving average just crossed 200 days

    https://www.google.com/amp/s/seekingalpha.com/amp/article/4332963-spy-plan-now-to-buy-bottom

    Perhaps start small portions next week or two/have quick stop loss selling signals though
  • johnN said:

    Hi FD1000, interesting article regarding sp500 maybe bottom by tom floyd/ (spy 50 days moving average just crossed 200 days

    https://www.google.com/amp/s/seekingalpha.com/amp/article/4332963-spy-plan-now-to-buy-bottom

    Perhaps start small portions next week or two/have quick stop loss selling signals though

    I know about 50/200 but it's too late. If you look at my SP500 (chart) from 2008 to 2009. Price crossed the 100 MA on 04/2009 but the 50/200 crossed only on 07/2009.

    I also learned that if many agree on the same indicators they will not work as well and 50/200 cross is one of them.
  • edited March 21
    For those that want a mutual fund that throttles its asset allocation between bonds and stocks based upon the movement of the S&P 500 Index might want to check out a fund that I own (CTFAX). I bought this fund back in 2008 & 2009; and, it was one several of the funds I used to enjoy the ride back up ... and, I kept it as a member of my hybrid income sleeve to harvest profits from the stock market.

    https://www.columbiathreadneedleus.com/investment-products/mutual-funds/Columbia-Thermostat-Fund/Class-A/details/?cusip=197199755&_n=1

    Be sure to check out the Asset Allocation Update(s). It might give you some buying queues. Just this week it went from 15% equity to 60% equity and can go up to 90% equity should the stock market continue to decline.

  • edited March 21
    IF you're young and have time on your side, this past few weeks has been a fantastic opportunity to embrace volatility and DCA into positions you want to keep for the long-haul. I've incrementally put a significant amount of idle cash to work into both new and existing positions since I've been waiting for such a massive 'correction' for several years now....firesales like this on quality names don't come along often.
    rono said:

    Howdy folks,

    You start buying just after you projectile vomit all over your screen.

    Start window shopping now for the post virus world. Don't try to play the froth. Go after those that are winning in this nastiness.

    Just my plan,

    Rono

  • CTFAX - Appears to be down 10.1 % since 3/9 - high of $15.57. Good, bad, or ugly ?
    I have no idea.
    Derf
  • rforno said:

    IF you're young and have time on your side, this past few weeks has been a fantastic opportunity to embrace volatility and DCA into positions you want to keep for the long-haul. I've incrementally put a significant amount of idle cash to work into both new and existing positions since I've been waiting for such a massive 'correction' for several years now....firesales like this on quality names don't come along often.

    rono said:

    Howdy folks,

    You start buying just after you projectile vomit all over your screen.

    Start window shopping now for the post virus world. Don't try to play the froth. Go after those that are winning in this nastiness.

    Just my plan,

    Rono

    rforno said:

    IF you're young and have time on your side, this past few weeks has been a fantastic opportunity to embrace volatility and DCA into positions you want to keep for the long-haul. I've incrementally put a significant amount of idle cash to work into both new and existing positions since I've been waiting for such a massive 'correction' for several years now....firesales like this on quality names don't come along often.

    rono said:

    Howdy folks,

    You start buying just after you projectile vomit all over your screen.

    Start window shopping now for the post virus world. Don't try to play the froth. Go after those that are winning in this nastiness.

    Just my plan,

    Rono


    Agree, 100%. Some day this will be viewed as the buying opportunity of our lifetime, by a mile. If that turns out not to be the case, we are all screwed. Those holding all cash will not be much better off...if at all. There will be riots in the street, hyperinflation from failed government stimulus, etc.

  • In combo with rforno comments. Youngsters, does it make sense to hold some dry powder in your 401-k accounts to fire a shot or two at times like this ? Or would it be better to rebalance if 90-10 or 80-20 , before the downdraft ?
    Just some Sat. morning thoughts running through my coffee induced head.
    Enjoy your weekend, Derf
    P.S. @rforno did you
    buy during 3/rd qter
    drop 2018 ?

  • I bought a little yesterday like I did Wednesday. About 4% of my portfolio moved from ultra short bond funds to dividend and growth (PRFDX, PRSCX)
  • edited March 21
    Hi @Derf, Yes the fund is down ... I have CTFAX off its 52 week high by -11.1% and down ytd by -7.41%. In comparison, I have the S&P 500 Index (SPY, my stock proxy) off its 52 week high by -32.5% and ytd down -28.48%. Interestingly, AGG (my bond proxy) is off its 52 week high by -7.75% and ytd down -1.67%. Since, CTFAX loaded equities on Monday and reduced bonds I am surprised that it is not down more than it is. Skeet
  • @Old_Skeet; Thanks for the comeback. Although listed as (10-30% allocation), equity % can go up to 90%. I'll mention also no load at Schwab. 5 stars rated .

    Have a good weekend, Derf

  • re: 2018's Christmas swoon ... yes, I did some buying back then, mostly adding to existing positions. Nothing like what I've been doing these days, though.

    I had some dry powder in my 403(b) that I normally use over the summer to invest into things when my employer contributions stop - but I deployed it 2x during the China spring swoon of what ... 2015? and have used it a few times now to buy into my one mutual fund holding as it has fallen. The dry powder left in that account now is down to about the equivalent of a month's employer contribution.
    Derf said:

    In combo with rforno comments. Youngsters, does it make sense to hold some dry powder in your 401-k accounts to fire a shot or two at times like this ? Or would it be better to rebalance if 90-10 or 80-20 , before the downdraft ?
    Just some Sat. morning thoughts running through my coffee induced head.
    Enjoy your weekend, Derf
    P.S. @rforno did you
    buy during 3/rd qter
    drop 2018 ?

  • If CTFAX is at 60% equity, it should probably ,beginning on 3/9 ,be compared to other allocation funds like VWELX FBALX JABAX VLAAX etc
  • While thinking about buying back, we are involved in an intellectual decision making. But this might change in the future.

    The number of deaths in Italy doubles every 3 days, in New York - every 2 days. This is exponential growth, in its early stages. The total number is small, one death per million people in US, so there is no panic yet. However, if this growth continues unmitigated, real panic may ensue. And in that case, the bottom perhaps will be at a very different level. It is a binary outcome: Either the outbreak subsides soon enough, or not. This may affect the way we are placing the bets.
  • @finder I think you are spot on. The Italian numbers are extremely concerning. Over 700 deaths today. And health experts in the U.S. keep saying that we are on the same path. I'm hopeful that we don't see these same spikes but we just don't know yet. Italy has a great health system but like us they got serious about it too late. It's just not possible to know yet how this is going to play out. Too much of the country still doesn't take the outbreak seriously enough. People could really panic and that will affect markets.
  • Does anyone know how much the market rallied back in 2008 after the bailout was announced?
  • @Finder- Sir: I note that you've been around MFO for over six years, but we very seldom hear from you. That's a shame- your observations and comments are well done, and I'm betting that your continued contributions to the discussion would be well received.
  • Dear Old_Joe, we are not born investors, my profession is very far from it, but life offers us many opportunities to make silly mistakes. That is why I am following you for many years any trying to learn from you and many others.

    MikeW, I fully agree that the financial support may give huge unexpected boost to the market. I am still 60% invested, I do not want to be too smart about things that I do not understand well enough. My main concern is that if the outbreak is not mitigated soon, the emotional response will be very strong, and the standard tools like looking at the 200 day moving average may not help us to understand what is going on. Probably we will know part of the answer soon.
  • edited March 22
    MikeW said:

    Does anyone know how much the market rallied back in 2008 after the bailout was announced?

    You could zoom in on an S&P fund chart at M* to get a sense of that if you knew the date.
  • Emergency Economic Stabilization Act of 2008 - Wikipedia
    [Search domain en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008] https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008
    The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008," was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush.The act became law as part of Public Law 110-343 on October 3, 2008, in the midst of the financial crisis of 2007-2008.

    Your welcome, Derf
  • Hi @MikeW

    The below chart start point is set in reference to the vote date for the "bail out" program.

    SPY large cap, one year, Oct. 14, 2008 - Oct. 15, 2009

    So, $100k on Oct. 14, 2008 has a value of $68,500 on March 6, 2009 (-31.5%) and finds a break even point about Aug. 1, 2009. One year out finds a +9.9% on Oct. 15, 2009. Course, the sell down began earlier than Oct. 14, 2008 and many SP500 type holdings had a lower negative, for a short period.

    Aside from the commonly known "congressional bail out package" vote that passed Oct. 14, are 2 other support programs; being TARP and TALF. You may read more from this March 17 post. TARP and TALF are clickable links in the March 17 write. From recall, I believe the TALF program continued into April, 2010. These 3 "bailout programs were not solely aimed at the large banks; but towards companies on the edge of "no money" remaining; as in insurance companies that would not be able to support payouts to clients. This list would include life insurance policies and all of the annuities, etc.

    Well, anyway. My 2 cents worth.
    Take care,
    Catch

  • @MikeW,

    As a subscriber to MFO Premium many of your questions can be found through the database collected and analyzed by our very own @Charles. The tools provide powerful insights to analyze mutual fund's performance and risk in terms of Ulcer Index, bear rating and other statistic parameters (Sharpe, Sortino and Martin ratios) over the lifespan of each mutual fund including the bear markets. For example, Vanguard Total Stock Market Index fund, VTSMX had a maximum drawdown of -50.9% during 2008. It took 52 months or 4.3 year to fully recover. The emerging market and developed market indeces have equally if not worse drawdown % and long recovery periods.

    There are few bright spots in the mutual fund universe and they are posted here as the Great Owl funds. In order to qualify as Great Owl funds, the funds are analyzed monthly using the above metrics. For example, T. Rowe Price Capital Appreciation fund, PRCWX is an asset allocation fund with 70/30 stock/bond composition. In 2008, the maximum drawdown was -36.5% but the recovery period was 29 months while the annual return is higher by 1% higher from 2008 to Feb 2020. And there are a number of Great Owl funds where I can use to construct a solid portfolio. The subscription rate is $140/year and I am more than happy to pay 10X of that amount. Can you say the same for Morningstar?

    Charles Lynn Bolin who writes for MFO's monthly commentary as well as Seeking Alpha, utilized the database of MFO Premium as the basis for his informative articles.
  • edited March 22
    It seems to me that with respect to "when to start buying" equities/equity funds the decision should mainly be based on two factors:
    • How close are you to retirement?
    • Do you believe that the equity markets will eventually recover and continue to operate as they have historically?

    If you have five to ten years left to accumulate before retirement, and you believe that the markets will, in time, recover, then what's the problem with buying right now? There's a "1/3 off sale" going on even as we sit here.

    If you're a little early, the market will decline even more before stabilizing and beginning another upward cycle. If you prefer to buy a little now, and maybe a bit more each week for a while, you will either get even better prices or maybe pay just a bit more, depending on what the markets do. Nobody knows exactly when we will hit bottom, but we're certainly in a good buying area right now.

    Please note that I'm restricting my perspective to the equity market. What the bond market will do is being manipulated by so many outside actors that it's impossible to know what's going to happen. I'll leave the bond commentary to my friend Catch22.
  • @Sven: I appreciated hearing your thoughts. I also believe after reading that this is an apple to orange comparison.
    Why not use another allocation fund & compare it to PRCWX.

    No harm no foul, Derf
  • @Derf and @catch22 thanks so much for providing charts and links to info on the bailout package. Catch22 that chart on the SPY large cap was particularly helpful. We had a lot more downside after all the different bailout packages went into effect. Obviously this downturn is like no other we’ve had but still useful to take a look at 2008.
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