Should I sell my index funds?

Thank you Scorpion_runner for taking your time to share your thoughts; they are appreciated. If the market goes sideways for a few months I will do day trading within a price range for buying and selling. If the market starts to go down significantly and gold prices rise into the $1300 + range I may just hold what I have. I have 1654 shares of JNUG right now but if it goes over $9.25 tomorrow I am going to sell and buy JDST. Thank you.

More examples.

" Hedging: 3 Ways You Can Reduce Your Investment Risk"

3. Investing in a competitor

Sometimes, you don't need to make an investment that will necessarily move in the opposite direction from the risk you want to hedge. You can get some hedging benefits from making investments in multiple players in a given industry. Doing so won't eliminate the risk that the entire industry has in common, but it will address the risk that the company whose stock you currently own turns out not to be the winner in that industry.

As an example, say that you hold shares in a major U.S. airline. You think that it's likely to thrive both because the industry as a whole is healthy and because that particular airline has competitive advantages over its peers. However, you acknowledge that your stock also has unique risks that some of its competitors don't have.

If you want to hedge your airline position, you could buy shares of the most attractive competing airline. Several outcomes could result:

If the entire industry does well, then both stocks could go up.

If it turns out that your fear about the first airline were warranted, a rise in the second airline's stock could offset losses for the first one.

If something happens to hurt the entire industry, both stocks could fall.

Finally, if you're wrong about the hedge, then the second airline you picked could underperform the one you already owned.

As you can see, this isn't a perfect process. But it has the advantage of diversifying your portfolio at the same time that it protects against a company-specific risk, and that appeals to many stock investors. "

>SO THERE ARE MULTIPLE FORMS OF HEDGING

I'm -$6500 after the late rally today. I'm glad I didn't sell so far. The news is still down n gloom about futures.

you don't know wrote:

It shows how useless your input is. In fact, it is worse than useless, it is harmful.

That's never stopped him before.

Blowing Rock Master wrote:

This sounds like an interesting idea for trading gold. I'm going to have to look into it. How do you decide when to switch from one to the other?

Both of them have bombed the last few years. Good grief, check their histories.

Here's a Reddit thread about JDST and JNUG.

Your 5 year old book only has 4 ratings on Amazon - doesn't seem to be all that popular.

Bowing Rock, the strategies I tested were trading strategies that did buy more after a gain in the index, and also buy more after a decline index (rebalancing strategies in general, but it was more complex than this)...And I did it for like 1900-1925, 1901-1926, etc...all the available periods over a hundred year period.

You apparently have" found" the winning stock market strategy as posted where you stay out tof the market in October basically, and miss all the steep market declines. My question to you is why are you using your other short term strategies and long term strategies as you said in prior posts??? I mean you know how to beat the market, your system worked over a 50 year period....but you continue to use other strategies instead of this proven winner????????

Direct quote from your posts:

The systems I use aren't always right. In fact, I'd say they're only right about half the time.

My last piece of advice for investors/runners out there is to ignore charts and moving average stuff...this is called technical analysis and is totally useless. All the technicians will disagree with me, and CNBC has these chart people on all day and I cant believe any sound MBA or business person puts a grain of salt into there bs.......Why didnt any chart person tell me in September on CNBC or whatever, the chart is headed south in a bear market?????? Charts tell you nothing about the future of a stock or market...only the past...think about it, why would the stock price of NFLX yesterday, or a year ago, or 2 years ago tell me how many people will signing up or getting rid of NFLX?? Good luck to all!

Mr. Expert Blowhard wrote:

Your 5 year old book only has 4 ratings on Amazon - doesn't seem to be all that popular.

You appear to be the most knowledgeable person on this thread, so you probably shouldn't buy it. In fact, you should write your own book so that the rest of us could benefit from your expertise. I'm sure it will be a best seller.

Thanks for sharing your technique. It sounds a little more "fuzzy" than I would be comfortable with but I'm going to look at it over the next week and see if I could come up with some hard and fast rules. It sounds like it could be a good candidate for Renko charting.

I numbered the points you made so I could respond to them in a coherent manner.

1. Correct me if I'm wrong, but what I get from your brief description of your dissertation is that you were comparing buy & hold to dollar cost averaging (which is really just a variation of buy & hold). I'm not surprised that buy & hold beat that.

2. I didn't "find" the Best 6 Months strategy. It has been well known by stock traders for decades and was first described in print by Yale Hirsch in 1986. I told you in my previous post exactly how it is implemented. You could easily test it yourself. You could probably get a research paper out of it.

Why don't I just use this strategy? Because I've developed a better one. I merely gave you two very simple strategies in my previous response to you because they could be quickly described. The one I use would take many paragraphs and I'm not going to take my time to post it on LRC. If you're really interested in finding out what it is then you can find it in chapters 11 and 12 of Five Ways to Beat the Market. I'm sure you could write off the cost of the book as a research expense.

I also use short term strategies because I'm diversifying by time. The long term strategy is less volatile while the short is more volatile. Put them together and they balance out giving a smoother equity growth curve.

3. So? I'd rather be right half the time and make a lot of money then be right all of the time and make less money. Isn't making money the entire point of speculating?

4. Yes, what I do is technical analysis (some of it is actually statistical analysis). And if you'd bother to backtest the two examples I gave then you'd see that your statement that it doesn't work is incorrect.

Your statement that technical analysis doesn't predict anything is correct, but that is a strawman argument. I never said it did. In fact I explicitly stated that it doesn't. There isn't a single investment system out there that can predict the future (including whatever you do). That is an impossibility.

Technical analysis tells you what is happening right now. It won't tell you if you are at the top or at the bottom. It will tell you if the market is going up or going down. It won't tell you if the market will continue to go up or go down. If you know of a way to accurately determining that then please let me know and I will use it.

If my strategy tells me the market is going up right now then I can speculate knowing that I am taking a risk and that my strategy will tell me if the direction changes to down so I can get out. Fundamental analysis won't tell you that. It just tells you what happened 3 to 6 months ago. If things go wrong then you'll find out 3 to 6 months later. Buy & hold (buy & hope) doesn't tell you anything. All that is is speculating with your fingers crossed.

Thank you Scorpion_runner wrote:

I have 1654 shares of JNUG right now you.

3x leveraged shares of mining companies in Africa that are mining the most market manipulated metal in history.

Nice.

Blowing Rock Master wrote:

Technical analysis tells you what is happening right now.

No it doesn't, it tells you what just happened.

TA is pseudoscience, an attempt by obnoxious business school kids to understand probability and market theories despite the fact they managed to pass Calculus 1 with only D-.

You mad, bro? Follow the advice of Flagpole, and always earn 15-20%+ returns.

Freaking out wrote:

I'm freaking out. This year was my first time investing in a taxable account after maxing out retirement accounts. I've put extra money into an index fund whenever I had it, didn't DCA or anything. Turns out I bought at the peak. My account had about 65k a couple weeks ago, now I'm looking at a 7k loss if I sell. There seems to be no end in sight!

We are trying to save up for a house next year, but we just lost one month's worth of income. Should we sell to stop the bleeding? I know we should have sold a week or two ago but it's too late.

If you are freaking out you had no business entering the market in the first place. Fluctuations like this one are the nature of the market. This isn't even a bad one (yet?). The market pretty frequently fluctuates 20% or more from peak to bottom in a calendar year. However, the long term trend is always up, about 9% on average, better than that if you have a good dividend index fund. Anyone who doesn't understand that AND isn't prepared to live it shouldn't be in the market. If you sell now, you're a sucker. People like me are BUYING right now. Stocks are on sale. Sure, they might go down further, that's always possible, but they are (or were) already down 20%, and 20% down from the peak means a 25% return on the way back up to previous highs.

I am currently down about 6.5% for the year but just took the opportunity to dump more money in the market I wasn't planning on due to the downturn. I didn't time it perfectly but still managed to buy at about a 17% discount from the peak. As I said earlier, the market could drop another 10%, perhaps even more, but it's unknown. It could also easily bounce back and never hit these low levels again. That being said, it will PROBABLY be significantly (5% or so) from where it is now in six months and up 25+ percent in another 3 years. No need to fret.

My strategies tested were not dollar cost averaging. It was one portfolio that was rebalanced based on markets going up or down...no money was added to the portfolio that occurs with dollar cost averaging.

This statement by you says it all:

"I'd rather be right half the time and make a lot of money then be right all of the time and make less money."

What????????? So if you were correct 100 percent of the time, you would make less money than being right half of the time???

You are losing a lot of credibility with your TA that you do for trading...trust me, Warren Buffet does not look at charts...surprised you have an MBA.....I would be surprised if a business school is teaching TA to their students....but CNBC caters to all the TA analysts with their chartists...which I find amazing

I keep having a reoccurring thought, sort of like a dream, where Napoleon and his grand army of 680,000 invade Russia in 1812 only to retreat in November while being decimated by the Russian winter. 27,00 soldiers survive the Russian winter. The current stock market is Napoleon's army and in the next three months the Russian winter is going to devastate the market. These thoughts of the "Russian winter" and the "stock market" are in my head every day. Will this come true? Only time will tell.

Some worthwhile reading material for those discussing the precious metals trade: http://www.paradocracy.com/2018/12/youtube-is-economically-illiterate.html

Blowing Rock Master wrote:

Mr. Expert Blowhard wrote:

Your 5 year old book only has 4 ratings on Amazon - doesn't seem to be all that popular.

You appear to be the most knowledgeable person on this thread, so you probably shouldn't buy it. In fact, you should write your own book so that the rest of us could benefit from your expertise. I'm sure it will be a best seller.

Henry Hazlitt's "The Failure of the 'New Economics'" has 13 customer reviews on Amazon. One of the 21st century's most influential reporters of economics, this treatise is the single best critique of the Keynesian school that has ever been published. Its limited number of reviews serves merely as a suggestive reminder of how few people thoroughly research the field; it says nothing of the quality of the work.

My response doesn't intend to defend the poster's book, but to expose the fallacy of judgment on the basis of popularity or published reviews.

Thank you for the article link. It took quite a while to read but does make several good points. The main thought for me is where the author points out that gold has value in itself because of all of its uses and therefore will always have value. Most investments are promises whereas gold is real. Gold closed Friday Dec. 28 at $1283.40 which is the highest I have seen in the last six months; since June 18, 2018. I wonder how many days it will take for gold to reach $1300. The next question is "How high will gold go?" We're all going to find out eventually.