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abenjami

I'm going to liquidate my portfolio

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abenjami   
38 minutes ago, Jamalisms said:

When we hit a new high, how often has gone X, Y and Z % above that high before falling? Has it always gone back below the previous high or has it merely fallen back some from whatever it is when it starts the fall?

Less looking for specific answers and more speaking out of my ass to suggest that these questions matter and may indicate that your strategy isn't quite so guaranteed if you researched and got the specific answers.

What you are saying makes perfect sense.

I don't have exact numbers but if you look at a historical chart and then drill down into say 5 year segments, it's readily apparent IMO. 

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Cyrus   

To be quite honest, you'll probably lose money and trigger a huge tax expense as well.

If you're fully invested you can sell off some positions that may see deteriorating fundamentals (or weakness), park the money for a few months and re-balance later if you want.

But selling off your entire portfolio makes little sense unless you really don't have any convictions in any of your investments (which begs the question - why do you own shares). It's hard to anticipate what may happen to any particular stock even when market sells off and individual companies can recover quickly and unexpectedly. 

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abenjami   
9 minutes ago, Cyrus said:

To be quite honest, you'll probably lose money and trigger a huge tax expense as well.

If you're fully invested you can sell off some positions that may see deteriorating fundamentals (or weakness), park the money for a few months and re-balance later if you want.

But selling off your entire portfolio makes little sense unless you really don't have any convictions in any of your investments (which begs the question - why do you own shares). It's hard to anticipate what may happen to any particular stock even when market sells off and individual companies can recover quickly and unexpectedly. 

How will there be a huge tax expense when my entire portfolio is in tax deferred accounts?

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Cyrus   
6 minutes ago, abenjami said:

How will there be a huge tax expense when my entire portfolio is in tax deferred accounts?

Fair enough. 

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@abenjami Why are you trying to sell off now instead of selling off a year ago, when the Dow was scraping against the top of the highs like in the chart I added below this post?  You can see that it had a couple nice dips down to the 200 day weekly moving average, where your strategy would have worked.  If you're looking for Dow 17k, that's only a 10% move down from here.  10% is a decent gain, but it has plenty risk attached to it now because the Dow isn't scraping the top anymore like it was a year ago.  Week before last it finally broke through the top resistance line (red line on the chart) with a nice weekly gain.  Once a breakout like this happens, it doesn't always immediately pull back.  Lots of times it keeps on running for a bit.  I'm not just an investor, I'm also a trader, so I'm just trying to show you from a technical analysis standpoint so you can see what I mean.

2016-07-25_0027.png.

Edited by TitanedUpSince'70

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chef   
2 hours ago, abenjami said:

How will there be a huge tax expense when my entire portfolio is in tax deferred accounts?

Just curious - and I know a few routes there - but how are they all in tax deferred accounts?  I would assume these are all not IRAs as I would guess you might exceed limits.  After tax 401K?  Safe Harbor/SIMPLE?

 

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OILERMAN   

I think Abejami previously posted he had a Sep account, in which case depending on income you can invest up to 52K(?) a year......

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On 7/24/2016 at 0:48 AM, abenjami said:

The market has been riding strong since January when some people pissed their pants over a seasonal adjustment period.

The DJIA is trading at an all time high right now.

Will it crash next week?  Probably not.

Will it continue going up for the next month or so?  That's certainly possible.

However, I can tell you three things for sure.

1.  At some point in the relatively near future, it will go down below 17,000 again.

2.  From a long term perspective, it will go back up afterwards.

3.  None of us are going to be able to time it perfectly.

People often get too wrapped up in advanced analytics that they miss the obvious and forget basic economic principles.  Buy low, sell high.  The market is higher than it's ever been right now.

I'm liquidating and waiting for the fall.  When the time seems right, I will dump my wad of cash back in at a lower price point.

They were talking about this on NPR this a.m. Funds are increasingly cash heavy right now...waiting for the fall. They also talked about how Vanguard bonds have returned 21% because the interest rate didn't climb as expected. 

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I'm not a stock broker, CPA, or CFP, but if I were you, I'd just reallocate my investments to less volatile, low return until your "fall" hits. Attempting to time the market is silly, and as previously mentioned, you'll typically face penalties.

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Denali   

 

On 7/23/2016 at 11:48 PM, abenjami said:

The market has been riding strong since January when some people pissed their pants over a seasonal adjustment period.

The DJIA is trading at an all time high right now.

Will it crash next week?  Probably not.

Will it continue going up for the next month or so?  That's certainly possible.

However, I can tell you three things for sure.

1.  At some point in the relatively near future, it will go down below 17,000 again.

2.  From a long term perspective, it will go back up afterwards.

3.  None of us are going to be able to time it perfectly.

People often get too wrapped up in advanced analytics that they miss the obvious and forget basic economic principles.  Buy low, sell high.  The market is higher than it's ever been right now.

I'm liquidating and waiting for the fall.  When the time seems right, I will dump my wad of cash back in at a lower price point.

 

On 7/24/2016 at 5:41 AM, OILERMAN said:

This is one of the problems....

It could go higher for much longer and/or when you get in it could go lower much longer.....

You have to guess right twice

What about just selling short instead?

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abenjami   
9 hours ago, chef said:

Just curious - and I know a few routes there - but how are they all in tax deferred accounts?  I would assume these are all not IRAs as I would guess you might exceed limits.  After tax 401K?  Safe Harbor/SIMPLE?

 

As Oman mentioned, I have a SEP.  The contribution limit is awesome.  For 2016 it's $53,000 (or 25% of my income, whichever is lower).

I also have a 401(k) from prior employment and a small IRA from back in the day when I was able to contribute to those before my income crossed the barrier.

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abenjami   
11 hours ago, TitanedUpSince'70 said:

@abenjami Why are you trying to sell off now instead of selling off a year ago, when the Dow was scraping against the top of the highs like in the chart I added below this post?  You can see that it had a couple nice dips down to the 200 day weekly moving average, where your strategy would have worked.  If you're looking for Dow 17k, that's only a 10% move down from here.  10% is a decent gain, but it has plenty risk attached to it now because the Dow isn't scraping the top anymore like it was a year ago.  Week before last it finally broke through the top resistance line (red line on the chart) with a nice weekly gain.  Once a breakout like this happens, it doesn't always immediately pull back.  Lots of times it keeps on running for a bit.  I'm not just an investor, I'm also a trader, so I'm just trying to show you from a technical analysis standpoint so you can see what I mean.

I didn't sell last year because I didn't want to take the risk.  Buy and hold long term was the strategy.  After a buy, I generally hold some cash on the sidelines, wait for a dip, and then buy a chunk more.  I made purchases last August and this January during dips.

This has been a nice investment strategy but it leaves so much on the table by not profit taking at opportune times.

Your point about Dow 17k being only a 10% move is well taken though and a good reason not to liquidate.

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abenjami   
36 minutes ago, SleepingTitan said:

I'd just reallocate my investments to less volatile, low return until your "fall" hits.

This is what I am trying to figure out.  Where can I park my cash that is low risk, immediately liquid, but also completely untied from the market?

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ctm   
26 minutes ago, abenjami said:

This is what I am trying to figure out.  Where can I park my cash that is low risk, immediately liquid, but also completely untied from the market?

If I were going to liquidate, which I wouldn't, then I would re-invest in an intermediate term bond fund, similar to this one.

https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0071

If you aren't familiar with the concept of duration as it applies to bonds, then you might want read the note about it near the bottom of the article.  It will explain your risk level with this type of fund.

I would add that I just spent some time with a personal friend who has his PHd in finance and owns his own money management firm.  We discussed a client who wanted to do what you are advocating.  My friend said that this was the only time in his professional career that he ever refused an order from a client.  The client liquidated anyway and missed the entire upside of the 2008 collapse.  This situation is obviously different but there is still risk involved.

An alternative strategy would be just to sell underperforming assets, postpone future buying and raise additional cash rather than trying to hit the home run by selling everything.

 

 

Edited by ctm

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30 minutes ago, abenjami said:

This is what I am trying to figure out.  Where can I park my cash that is low risk, immediately liquid, but also completely untied from the market?

Do you buy or sell options?

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