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Getting off the sidelines - when?



  • edited January 2022
    m1finance offers 1% too but unlike TMo does require purchase of a subscription I believe so TMo is better. However m1finance offers a brokerage account which comes with many handy single click or automated portfolio mgmt features.
  • edited January 2022
    The stock market is adjusting to the reality that interest rates are probably heading up for at least a while. It's too early for me to have a clear sense as to how far and for how long. As to one of the questions at the start of this thread:
    JD_co said:

    For those waiting on better valuations to buy Equities, at what point would you be a serious Buyer? Do you have a specific plan in place?

    My last significant portfolio changes occurred in 2020 when high yield and utility stock sleeves were added to the portfolio (they now constitute about 40% of portfolio). The high yield sleeve purchases mostly focused on real estate, financial, and energy sector stocks that appeared to be on sale as well as on a few CEF purchases. Also, I used proceeds from the sale of ZEOIX to buy some utility stocks that appeared to be reasonably priced. That active trading year was followed by some 2021 portfolio cleanup trades as well as a little "special situations" trading (that produced mixed results). My basic goal for 2022 is to refocus on being a buy and hold investor. VIX above 35 for a while with a fair amount of panic and exhaustion would get me thinking about making some changes again. A possibility list for trades is being maintained but I would want to see what looks interesting at the time I become motivated. That type of market probably produces the Zweig momentum buy signal Junkster mentioned. But I don't know where to find that one.
  • edited January 2022
    I've had an Ally Online Savings Account since late 2013.
    This account currently offers an APR of 0.50%.
    There are no monthly maintenance fees or minimum balance requirements.
    Since opening the Ally account, I've opened several savings/checking accounts at other financial institutions to take advantage of appealing rates. These accounts were subsequently closed after prevailing rates became uncompetitive. Rate comparison shopping coupled with opening/closing accounts became tiresome so I haven't pursued this in several years. The Ally Online Savings Account is primarily used for savings and as a "hub" for electronic fund transfers to/from my other financial institutions. I'm a satisfied Ally customer since they have a good website, offer a reasonable APR (for current conditions), and I haven't encountered any EFT issues.
  • I've been pleased with my Schwab AMEX card, but I have no experience with their online savings account.
  • We've had Schwab checking and savings accounts for years. No problems at all, but the interest rate is next to nothing.
  • edited January 2022
    From Barchart article today. Does this make sense or is this a solution looking for a problem? Tech cos typically have very low levels of debt.

    "Technology stocks are under pressure on concern the Fed will announce after the Tue/Wed FOMC meeting that it will start raising interest rates as soon as March"
  • While techs may not borrow much (or borrow just for the fun of it at low rates), their valuations (P/E, P/S, P/hype) are affected by rates.
  • edited January 2022
    If you have any business income, Amex offers a business checking account that currently pays 1.1%.
  • Yeah, hey, maybe you guys can start a new thread if you wanted to talk savings rates?
  • @davfor, thanks for sharing your view. I too have made sizable changes throughout 2021 in order to lower the risk from multiple fronts: interest rate hike (inflation) and potential war (Ukraine and other conflicts). Will be patient just like previous severe drawdowns.
  • edited January 2022
    VIX also had a huge reversal but remains high - a VIX of 29.90 still projects daily volatility of +/- 1.6% (high). What was interesting was the muted SKEW (EOD value), i.e. the traders weren't rushing to buy puts. This relatively high VIX and relatively subdued SKEW combo may mean that the SP500 may try to form a base here. Stock futures are now negative this evening.$VIX&p=D&yr=1&mn=0&dy=0&id=p14688267036
  • Junkster said:

    JD_co said:

    For those waiting on better valuations to buy Equities, at what point would you be a serious Buyer? Do you have a specific plan in place?

    What about Bonds (yeah, what about Bonds) - are any type/class of bonds worth holding in 2022?

    Current S&P 500 PE Ratio: 25.85
    Mean: 15.96
    Median: 14.88

    If you are on the sidelines congrats. Don’t see much fear in this market just everyone wanting to buy the dips. A lot of complacency. I guess that is what the past twelve years have conditioned investors to do. Should we actually get something more than a garden variety correction ala late 2018 and February/March 2020 would use a Zweig momentum buy signal to get back in. Worked like a charm after those two brief sell offs as well as the longer bear of 2008.

    As for bonds the scary consensus is buy floating rate/bank loan funds as they are the place to be during periods of rising short term rates. Can’t argue with that ( and I have an allocation there) other than it seems a bit too pat and overwhelmingly embraced. If you get a really bad bear market in stocks/junk bonds, the floating rate/bank loan category will not protect you,
    Without drilling deeper for month end distribution dates, month end NAV movements are always tricky to make sense of for fixed income OEFs but I see across the board both high yield and floating rate / bank loan funds are down on Thursday. It has been a long time since I have seen that happen. I hope this is not the start of something.
  • @Derf, I was giving a nod to Junkster. Do not worry, I do not have the capability to move the market.
  • High yield effective yield has popped over 5%. Per FRED, last time it was at that level was November 2020. Could be looking at a spike that'll eventually be a good reentry point.
  • edited January 2022
    Maybe it is just me but still don’t see the fear associated with past declines of this magnitude. It is all about buying dips and potential buys. Although not into analogous year investing, this reminds me a bit of 1973. There we had weak January performance after a double digit gain in 1972. Like now the weakness was due to rising oil and commodity prices and inflation fears with a Fed that was about to aggressively raise rates. We then embarked on the longest and deepest bear market since the Depression.

    @BaluBalu. As you saw another bad day for the junk bond OEFs a bit surprising in light of the strength in the major equity indexes. Many of the bank loan funds were lower too. The latter began acting suspiciously earlier this week so I said goodbye. That leaves me at 70% with the usual suspect of IOFIX which at least so far has survived the carnage elsewhere and up YTD. The play there though seems pretty much over. Wish I could buy its younger albeit less stellar performing sister which has yet to have a down month since its October 2020 inception, but not available to me at TD Ameritrade. Kind of following in the footsteps of IOFIX which has been positive every month but five over the past 6.67 years. Of course one of those five was a doozy for those that stayed the course.

  • Thank you for posting @Junkster . I've been coming inpatient , so will heed your so called warning, & make my dippings small in nature.
    Stay warm, Derf
  • edited January 2022
  • been coming inpatient should be the motto here sometimes
  • edited January 2022
    Derf said:

    ”I will heed your so called warning, & make my dippings small in nature.”

    Big Dipper hasn’t posted in a while. Probably busy snatching up all those bargains.

    Appreciate Junkster’s take. I agree with his observations. This is one strange market. Like tossing a deck of cards into the air and than watching where they fall. Still waiting for the eventual results in terms of winners and losers. Not on the sidelines, but gritting my teeth for what follows.

    Posted this elsewhere. Worth repeating here:

    “Fake it ‘til you make it might work in Silicon Valley. It's a less practical strategy for the Federal Reserve, which looks ready to compound one mistake with another.”

    - Ben Levisohn in this week’s Barron’s
  • Yes, very nice to have Junkster posting again!
  • Old_Joe said:

    Yes, very nice to have Junkster posting again!

    Thanks Old_Joe. But hopefully just an aberration on my part.

    Interesting bullish link below on sentiment and how it is similar to the 2018 and 3/20 bottoms. I am a big believer in sentiment albeit it was a more useful tool decades ago when it was less followed by the masses as an indicator. Let’s see how it plays out this time around.

  • @Junkster - thanks for the link. I believe I'll wait until the technicals show me some sunshine. Take care old friend.
  • edited January 2022
    Market movements this past week suggested to me the TINA way of viewing the stock market still had some life left in it. Perhaps there is enough ambiguity in the current situation that can continue to be the case at least for "a while".
  • edited January 2022
    davfor said:

    Market movements this past week suggested to me the TINA way of viewing the stock market still had some life left in it. Perhaps there is enough ambiguity in the current situation that can continue to be the case at least for "a while".

    FWIW - While Barron’s “sounded the alarm” (loudly) this week through its regular “Up & Down Wall Street” column, the underlying sentiment seemed to be that markets would grind higher thru most of 2022 with a recession beginning in early 2023. Pure conjecture of course. But based on the typical historical 8-14 month interval between the beginning of sustained Fed rate hikes and onset of recession.

    Above referenced column was penned this week by Ben Levisohn substituting for Randall Forsyth.
  • edited January 2022
    Looking at stock alternatives.....A chart that shows some of what's worked and what hadn't worked through the third week of the year.


    From: BDC Market Weekly Review

  • edited January 2022
    If I’m reading the chart correctly, it appears little has worked. Since MLP’s appear to have done well, here’s a definition for MLP ETF.

    “MLPs ETFs invest in Master Limited Partnerships (MLPs). These companies are generally involved in the transportation, storage, and processing of energy commodities such as oil, natural gas, refined products, and natural gas liquids (NGLs). Funds in this category tend to have attractive dividend payouts.” Source
  • edited January 2022
    Added more spxl

    Fidelity investors advisors -
    "High volatility from war Feds omicron
    We are in middle of (corrections) mid cycle expansions.

    Long terms views maybe good....earning seasons should be adequate***

    Got more beers and Rolaids maalox

    Enjoy the rides

  • Having more cash on the sideline may allow one to re-enter at better price points. This is going to be a challenging year.
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