Contrary Indicator?

[TomK]

Sell!

   
(On yahoo finance right now.)

[WRXodus]

Hah I'm getting that feeling, too.

[Dividend Watcher]

I'm not selling but new cash is sitting there with lowball limit orders.

I'm getting bored at these levels with minimal volatility. Just not finding much that interests me right now. A good correction would be fun about now.

[Kerim]

(05-28-2014, 12:19 PM)Dividend Watcher Wrote: I'm getting bored at these levels with minimal volatility. Just not finding much that interests me right now. A good correction would be fun about now.

Agree. Maybe it is time for another "what are you buying thread" to explore what few things people are finding to be good values right now. The things I'd consider buying right now (without considering whether / how they'd fit into my portfolio) off the top of my head are AFL, TGT, T, MO, and DE (loved that raise today).

[rnsmth]

I am pretty fully invested and am buying a little of everything I own by reinvesting dividends.

I believe my holdings are in the my porfolio thread.

[Kerim]

I know better than to put much faith in the financial press, but I'll have to admit that this article felt somewhat compelling to me. It argues, with lots of graphs, that the current bull is very long in the tooth. Combined with the extreme low in the VIX, and another article I read that enumerated several aspects of the current market that are *toppy feeling*, it got me thinking that perhaps we are due for a solid correction.

I don't think that this market is irrational, when you look at earnings and multiples. And (of course!) I am not even a bit tempted to attempt any any timing moves here. And as we DGers know, it is a market of stocks and not a stock market. And all that.

But I think most of us would warmly embrace a major downdraft right about now, given that there are so few obvious bargains out there right now. I'd love to see some better entry points.

Anyone have any market hunches / guess they want to share?

[daat99]

I spent a lot of time learning how to invest (and concluding that I want to be a DGI) and I still feel too much fear to start investing at a market this high.

My worst fear is that I'll put all my money into new portfolio just to get it cut in half in a month time because a bear market just started.

For now, I prefer sitting on the side and wait for the bear market to show its ugly head first.

That's my 2 cents (which I'm not investing just yet).

PS
I love this forum, keep it up

[Kerim]

(06-01-2014, 04:38 PM)daat99 Wrote: My worst fear is that I'll put all my money into new portfolio just to get it cut in half in a month time because a bear market just started.

For now, I prefer sitting on the side and wait for the bear market to show its ugly head first.

I don't blame you at all, daat. But just to play devil's advocate (and perhaps to completely contradict myself), a lot of people rightly believe that time IN the market is far more important than timING the market. The idea is that even if valuations are high right now, you are still missing out on dividends and growth in the meantime -- there is a real cost to waiting. And, we may NOT be on the verge of a big decline. Nobody at all can predict where we are headed from here. Here's an article that notes that on an inflation-adjusted basis, the S&P is not at all-time highs after all.

If you believe that the general trajectory of the market over very long periods of time is up, then the market will make new highs frequently, and while they may all seem scary, they are all lower than the newest high.

Maybe the best approach would be to develop a plan to very gradually ease into the market, so that you are not fully exposed quickly, but you still get some of your money working for you?

[Ok Red]

Weird market. Up days are super light volume. Downs days are high volume. Margin trading at nosebleed levels. Artificially low interest rates driving a chase for yield. Three rounds of QE have been marginally effective at improving economic conditions. VIX at low levels.

I think the Hedgies and institutional investors are fully invested, hoping for another good bonus year, but at the same time are ready to bail at the first sign of trouble.

I have established my initial positions - currently about 16% of my portfolio. I have 50% in cash ready to invest and will just wait until the inevitable correction. It's killing me to have that much cash, but after living through multiple downturns I know I have to be patient. The real question will be how to spot the bottom, or the approximate bottom. 20%? 40%? 50%? Who knows....

[kayboy]

(06-01-2014, 05:39 PM)Ok Red Wrote: Weird market. Up days are super light volume. Downs days are high volume. Margin trading at nosebleed levels. Artificially low interest rates driving a chase for yield. Three rounds of QE have been marginally effective at improving economic conditions. VIX at low levels.

I think the Hedgies and institutional investors are fully invested, hoping for another good bonus year, but at the same time are ready to bail at the first sign of trouble.

I have established my initial positions - currently about 16% of my portfolio. I have 50% in cash ready to invest and will just wait until the inevitable correction. It's killing me to have that much cash, but after living through multiple downturns I know I have to be patient. The real question will be how to spot the bottom, or the approximate bottom. 20%? 40%? 50%? Who knows....

[earthtodan]

(06-01-2014, 05:39 PM)Ok Red Wrote: I have 50% in cash ready to invest and will just wait until the inevitable correction. It's killing me to have that much cash, but after living through multiple downturns I know I have to be patient. The real question will be how to spot the bottom, or the approximate bottom. 20%? 40%? 50%? Who knows....

I know what you mean. I'm about 1/3 cash and it's burning a hole and dragging on my returns.

[daat99]

(06-01-2014, 05:27 PM)Kerim Wrote: I don't blame you at all, daat. But just to play devil's advocate (and perhaps to completely contradict myself), a lot of people rightly believe that time IN the market is far more important than timING the market. The idea is that even if valuations are high right now, you are still missing out on dividends and growth in the meantime -- there is a real cost to waiting.

This is very true indeed.
I'm not attempting to time the market, I'm just trying not to time the peek before a huge fall.
The way I see it is that there are too many experienced traders screaming 'it's going to blow" while too many newbies rush into the market.
I can't shake the story I heard about a guy (you probably know who he is, I don't recall his name) who sold everything he had because the person that was shining his shoes started to give him stock advice just before one of the major market drops.

I figured that if I invest now and lose 40% of my capital due to investing in companies that may cut dividends (which triggers my immediate sell signal) than I won't be able to recover this lose in a very long time.
The dividends gain I may have in case the companies won't cut dividends doesn't provide sufficient incentive for the risk involved.

Besides, I have my money stashed away in bonds for so long so I doubt the extra caution time for even 6 months will hurt me more than the past 10 years.

As of now I want to see if the market breaks from its all times-high into a newer growth trend or not.
Until I'll see such a signal I'm going to wait (im)patiently.