Stock Market

All of our accounts are not in the stock market....but we're near 75% between us (I think, because I only know a bit about her accounts).  Still, those accounts are just kicking arse!!

It will be interesting to see what happens when the fed takes their foot off the gas.   Another great study in government intervention in the markets, and why it nearly always ends in destruction.

I don't see that happening at least through the next election.........the dems can't afford it when all they really care about is keeping the White House.  They've got to have something they can point to as a success. LOL

I was 80% in the market, 20% fixed/bonds.  a month or so ago I went 70/30.  I want to have some cash to move back in with-when/if it takes a correction.  Or to buffer some instability.  But depending on your horizon and risk tolerance, 100%-in is a viable position.

but yeah, the Obama stock market has done well.

I'm exclusively a swing trader so I don't really care if the market goes up or down, I just prefer it to steadily go in one direction.  lol

You're absolutely correct that there are great returns on equities right now, but IMHO it's a very risky play because of the factors causing the rise.  The rise isn't because of profits, it's because there's nowhere else to invest.  Normally you have a nice balance between equities, bonds, and CD's but due to the fed pumping and dropping rates into the toilet the only place to invest is in equities so the stock market has been flying high on the Fed steroids.

It is unsustainable because something will eventually give and inflation will kick in and other investments will be better/safer bets.  When this happens it will end badly for equities, but there's no way to predict when it will happen.  So, you could have another 25% gain next year, and you could just as easily have a 50% drop next year.  When it does drop, it will likely stay down for many years trying to recover again.

There's a reason the investment pro's always tell you to diversify based on risk.  If you're sitting on a $5M portfolio and planning to retire next year it could easily turn into a $2.5M portfolio in a matter of months if you're all equities.  You have to diversify your risk to protect your capital at the expense of potential returns at some point for any sound retirement plan.

The trick is always when to get out.  Looking back everything looks awesome when it's peaking like this, but today could be the all time high for all we know and everyone could just watch their profits evaporate for the next year.  
That's what's so crazy about this stock market game, is anything can happen.  A meteor could hit the USA tomorrow and the market could be 50% less by the end of the week.

Well, then keep your tin foil hat on......it could save your life!!

haha, your so silly.  That's what the tinfoil lined bunker is for, duh!

You can say that again.  Been there done that many times.  

I used to spend a lot of time analyzing technicals and laying on complex spreads.  I finally ditched that approach and simply trade weekly index ETF options based on the 50 and 20 day MA.  If the 20 day MA is above the 50 then I go long for the week with a .90+ delta call or if the 20 day MA is below the 50 day then I go short with a .90+ delta put.  Basically riding the mini trend and the deep ITM option minimizes my down side and I have very little time decay.

This approach has worked pretty well for me the last year, but a flat choppy market could still jack me up.

And the Fed has TOLD you it will keep the economy propped up and recovering at least until after the 1st quarter of next year.  It doesn't matter if you think this is a real recovery or not.....there is certainly real money to be made in the market right now.  I'lll probably move quite a bit of my profits from this year.....it's more than I made working.

You are correct sir, and good call on your profits. IMHO

It's really weird because it's so hard to read the market.  One day we hear great news and it goes up, and the next day we hear really bad news and it goes up even higher because everyone thinks the Fed well keep pumping longer because of the bad news.  lol

Then sometimes we hear really good news and the market tanks because of the fear of the fed tapering earlier.

Thanks LB.  

I've been fairly busy with work so I haven't been playing in the market the last couple of months and had everything in cash.  This thread got me to checking things out again and I went through all of my normal technical analysis and I considered shorting QQQ on Monday.  However, I thought to myself.  You know, the market is just going insane and that LB guy is the eternal optimist so I'm going to go against trying to time the top and ride the trend. I bought a bunch of NOV5 13 QQQ calls and three days later I have a near 40% gain. on a dollar move up on QQQ.  haha

This market is so funny

HA!! Good for you dude!

I'm sticking with it for the forseeable future.  I don't think this run is anywhere near the top.  Hell, at this point I can be worng as hell and would have still made a nice profit unless the market tanks 40% or more.  What's funny to me is how many people have stayed out and missed this run.....and now they want in, which helps keep it propped up as well.

As you said earlier, you believe this is being driven by the Fed.....and I tend to agree. (although this is certainly not a "bubble" like the dot com and housing market were....the averages are staying within historica margins)  I think I'm out the day they are....the way I look at it, the signal could be pretty good.....maybe the market loses 10% or so right off the bat.....then get out....you're still way ahead of the game.  All you're doing now is sitting on the sidelines while they TELL YOU what they're doing.  To me it's crazy not to take them up on the offer.  Hell, with the way this administration is, they could keep their foot on the gas right through the next Presidential election.....it's the only really good news they'll be able to poiint to the way it's looking, they can't afford to stop now.