A.K.A. “Sucker’s Rally”

  The shorts are coming....

[quote=B24]A.K.A. “Sucker’s Rally”

  The shorts are coming....[/quote]

I feel like calling all my skittish clients to say, 'Ok, if you want off this train, right now is the time.'

Vin Diesel:

looks like the bear is over…time to load the boat on financials

  Ehhh, is this being sarcastic?

Just curious:

  The banks are raising new equity capital now at peak short term prices.   Last month they were trading much lower and no one was interested in buying banks. How helpful has this rally been for the banks and the government?    When it helps them it screws you. I plan on keeping my recent gains. Take some gains off the table while you can.            

Ron 14:

Its obvious that not a person on this site can consistently predict market fluctuations. Its obvious that many people on the planet can’t do this either, so why bother ? Get in, stay in, and win. And yes, you can still win even though you may have lost 35% the year before.

  You can win more if you didn''t lose 35% the year before.

Ron:

  Buy and hold?   I have clients that bought and held in the year 2000 and they have not made a profit yet.   How can you add value and justify a fee if you don't do some sort of market timing? I'm not suggesting huge allocation swings but I think we have to do something to grow the accounts.    This market is forcing more activity. There's no real economic growth so justing sitting around in the asset allocation model is not going to work. I can buy the Fidelity lifestyle fund and do that.   I would  rather buy and hold and watch the money grow. It would meet my client's objectives and allow me to spend my time prospecting and planning.  Mean time I have to try something different.  

iceco1d:

[quote=Sam Houston][quote=Ron 14]Its obvious that not a person on this site can consistently predict market fluctuations. Its obvious that many people on the planet can’t do this either, so why bother ? Get in, stay in, and win. And yes, you can still win even though you may have lost 35% the year before.

  You can win more if you didn''t lose 35% the year before.[/quote]   And you can win even more than that, if you aren't a Vikings fan!  [/quote]   Favre will take us to the SB!

[quote=Herman Munster]Ron:

  Buy and hold?   I have clients that bought and held in the year 2000 and they have not made a profit yet.   How can you add value and justify a fee if you don't do some sort of market timing? I'm not suggesting huge allocation swings but I think we have to do something to grow the accounts.    This market is forcing more activity. There's no real economic growth so justing sitting around in the asset allocation model is not going to work. I can buy the Fidelity lifestyle fund and do that.   I would  rather buy and hold and watch the money grow. It would meet my client's objectives and allow me to spend my time prospecting and planning.  Mean time I have to try something different.  [/quote]   I like big allocation swings.

Maybe it's not clear. I had a couple drinks and it's late.

My basic thought is that if you can use a little trading activity to increase returns you'll help your client. Buying and holding does not always work.

   

And before we start talking about trends, and blah, blah, blah, blah, Sam posted a few weeks ago that technicals indicated the market was about to head back south…I hope he didn’t act on that “indicator.” 

      ???????????????

[quote=iceco1d]Herman,

  MOST mutual funds out there don't "buy and hold" the same static allocation.  They have teams of Ph.Ds, MBAs, CFAs, and CPAs actively trading, and most of these funds were unsuccessful at avoiding the crash as well.
What makes you think that you, the retail "financial advisor" can beat them?    Besides, "buy and hold" doesn't mean you have to be only buying and holding stocks.  Or buying and holding just bonds.  You can be "buying and holding" a multitude of assets.  You can be making allocation changes based on client situation, not necessarily the market or economy, and still be a "buy and hold" investor.    In fact, Mr. Munster, if you take a look at a TRUE "buy and hold" portfolio, say of ETFs, or index funds, you'll find the balanced plain vanilla asset allocations did much better than many, many actively managed asset allocation funds (or other funds that have the latitude to go to equity, fixed income, and cash, at will).   Many people took a little extra beating last year, doing the exact things you propose.    And before we delve into Sams rebuttal - yes, you can buy & hold things that have negative correlation to the market too.  No, that doesn't mean a perfect -1 correlation, it just means negative.  No, that isn't a broken concept either.   And before we start talking about trends, and blah, blah, blah, blah, Sam posted a few weeks ago that technicals indicated the market was about to head back south...I hope he didn't act on that "indicator."    In any case, not trying to debate this again - but what you are proposing we should be doing to add value is false.    You want to add value to clients by doing something other than buying and holding ETFs?  Go sell annuities and lock out the downside.  Go sell munis to rich people in high tax brackets and provide them with tax efficient cash flow.  Go make sure people have enough life and disability insurance.  Go show people how to limit the downside to their asset allocation portfolios by using options.  Go make sure people are funding their Roth IRAs.  But don't go run-n-gunning their portfolios because you *think* all of a sudden the rules have changed. 
They haven't.  [/quote]   The greatest single post this site has ever seen.  I am not joking. This is how we add value. This is why people hire us. Not to predict the market. Not to find what will be hot next. Not to make predictions. Put a plan together and guide your clients.

I must say I agree with your post.

I just don't want to give back my profits and feel I need to do somthing. My client's held up rather well last year all things considered but I'm pissed ( and take it personally that we lost money).   I think we actually agree. I'm not suggesting wild changes in allocations daily but more of the type moves referred to in your post.  Maybe I'm a bit shellshocked but I have to go with my feelings which tell me it's ok to take some profits here.   No hard feelings. You can call me Herman.  

[quote=Herman Munster]

I must say I agree with your post.

I just don't want to give back my profits and feel I need to do somthing. My client's held up rather well last year all things considered but I'm pissed ( and take it personally that we lost money).   I think we actually agree. I'm not suggesting wild changes in allocations daily but more of the type moves referred to in your post.  Maybe I'm a bit shellshocked but I have to go with my feelings which tell me it's ok to take some profits here.   No hard feelings. You can call me Herman.   If your only job was to always be on the plus side you would have them in CD's. The markets fluctuate, they tank, crap hits the fan and it happens every 5-10 years. If you pull out at Dow 8500, buy back in at 7000, the client is going to expect that all the time. And that is something you won't be able to repeat consistently. The sell at 8500 may be wrong, who knows ?   [/quote]