Down goes the Dow

More reasons why passive investing is superior to active. Thanks for pointing this out.

Kerry O. wrote:

Ghost of Igloi wrote:

That is an issue sith mutual funds. However, ETFs are no free lunch since the broad sale in a short period of time can lead to wide swings in price. This is a liquidity event driven by concentrated positions where managers of the fund have problems identifying which underlying stocks need to be sold and in what quantity. The managers of mutual funds can raise cash in advance of liquidations which is an advantage in steep and rapid market decline.

More reasons why passive investing is superior to active. Thanks for pointing this out.

I guess your reading comprehension needs polishing.

calling one strategy active and one passive investing sounds the same to me as saying sitting-and-kicking is strategic running but that winning from the front is not strategic

The hang on wrote:

Heebab wrote:

Ok, I get that, but ETFs and individual stocks were also down. And 800 points is only about 3%, so not really a big deal.

The selling point is only important in relation to the buying point. Taken together they determine the amount of any net gain/loss.

Nope. That's realized gain/loss for tax purposes. When your holdings drop in value, you lose wealth.

What matters now is what happens next.

Sounds like you plan to hang on. I left $40k to $50k in to cover any bounce back but feel good about being 97.5% out of equities at this point.

Your reply has nothing to do with what I wrote. Try to stay on topic.

I don’t know precisely why not, I am relying on the word of a trader friend. He says that it doesn’t work for ETF’s either, and that that is one reason they were disallowed at one point—but what is “good enough” for etf’s is not good enough for mutuals. All part of thhe increased access by the everyman to risk products, buttressed by market stabilization.

It is easy and cheap for mutuals to operate as they do, and relatively certain, which meets the knowledge and disclosure criteria of mutual regulation. Apparently etf’s get into some trouble internally with their pricing mechanism, but it works well enough that they continue, relying on volume.

Personally, IDK.

ok now we test the 200 day average - we're right on top of it now. In the past we've punctured it, but just by a half percent or so, then back up, hetchy sketchy.

We'll see. Good sign that risk hedges like long term bonds and gold are up today, but I'd sure like it if the VIX hit 30 instead of 25.

[quote]calm down weirdo wrote:

"You pay fees for etfs too, you know?"

Nothing near the fees you pay for "actively managed" mutual funds.

"mutual funds make sense for buy and hold investors where the difference in price in the middle of the day and the end of the day is negligible compared to the difference in price on buy and sell date."

Why?

"Also, there is as much of a possibility that the delay will be beneficial as detrimental"

Not true during a sell-off, obviously

"value of mutual funds is the value of the holdings dividing by the number of shares in the mutual fund"

Genius. And 2+2 = 4.

"value of everything else is what someone is willing to pay you for it".

This is not true of the "value of the holdings" for mutual funds?

I swear to God, the intellectual level on this website is frighteningly low.

Market opened kind of quite -- but now again in a steep decline.

Dumped $30k of the $45k I had left in after selling off yesterday late morning.

Spoke too soon wrote:

Market opened kind of quite -- but now again in a steep decline.

Dumped $30k of the $45k I had left in after selling off yesterday late morning.

Hope you didn't dump too soon. Remember, he tells us "Most Investors Will Sell at the Bottom".

Ghost of Igloi wrote:

Kerry O. wrote:

More reasons why passive investing is superior to active. Thanks for pointing this out.

I guess your reading comprehension needs polishing.

...managers of the fund have problems identifying which underlying stocks need to be sold and in what quantity

This would not happen with passive investing.

mister wrote:

Spoke too soon wrote:

Market opened kind of quite -- but now again in a steep decline.

Dumped $30k of the $45k I had left in after selling off yesterday late morning.

Hope you didn't dump too soon. Remember, he tells us "Most Investors Will Sell at the Bottom".

Who says that?

It's absurd. One would have to have inside knowledge and willingly harm himself to consistently sell at the bottom.

That's simply financial industry propaganda.

Who says that wrote:

mister wrote:

Hope you didn't dump too soon. Remember, he tells us "Most Investors Will Sell at the Bottom".

Who says that?

It's absurd. One would have to have inside knowledge and willingly harm himself to consistently sell at the bottom.

That's simply financial industry propaganda.

hah. Market timing has a terrible record - failure, blown fortunes and bad results. You must know this,

Also - pro tip. Selling at 11 AM EST is a bad idea. Anecdotally that's when everyone executes their orders in a sell of situation that's often the spike down, as everyone moves to one side of the boat at the same time. not always, but enough to keep it in mind.

PPT! PPT!

Anecdotally? No hard data?

Propaganda wrote:

agip wrote:

hah. Market timing has a terrible record - failure, blown fortunes and bad results. You must know this,

Who says? Got data on this? Why, from a logical viewpoint, would timing the market result in failure and blown fortunes? As noted before, you would have to have some kind of inside info and be looking to harm yourself in order for timing the market to result consistently in poor outcomes. And, isn't timing the market kind of what these fund managers do? You are simply parroting financial industry propaganda.

Also - pro tip. Selling at 11 AM EST is a bad idea. Anecdotally that's when everyone executes their orders in a sell of situation that's often the spike down, as everyone moves to one side of the boat at the same time. not always, but enough to keep it in mind.

Anecdotally? No hard data?

Nein, mein Freund

20 years of living with the markets every day, is all. Just something to look out for.

oh sorry - you were talking about market timing. I was talking about the 11am-noon panic spike down.

I don't need to talk about market timing being a disaster. You can find research on that on the internet very easily.

PPT, exactly. They don’t need to do too much depending on volume, just enough to affect technical levels, especially the 200dma.

These signals drive the algos, and the signal is all that is needed. Once the algos take off the PPT can even sell back into the market and replenish the ESF.

Who knows how much juice they have, and how much sell volume they can handle, and at what speed. These things are being tested, but I am pretty sure they have significant headroom.

BTW i am sure they do this for strategically significant individual stocks as well as for certain indexes, companies like defense contractors and banks.

If the day finishes a bit above the 200dma, I will probably do some buying.

CNBC just said that the SP500 has not closed below its 200dma for something like 577 days.

These tv guys are hilarious to listen to, but even their smokescreen inanity is becoming infected with a slight bit of reality, finally.