Investing - Banks, Mutual Funds, Etc Open Discussions

[Kahlua Kid]

Any one else out there want to talk about where they invest? What's going on in the investment world? Ie., CD rates climbing... US Stocks remaining flat... China, India and other fast growing countries may be better bets? Mortgage rates climbing or remaining flat...

ING (FDIC Insured) now offering 4.75% interest through April 15, 2006 for new deposits - savings account - then reverts to 3.80%... pretty good for not having to tie your money up in a CD. www.ing.com (http://www.ing.com)


Any one interested in starting an investment club here locally in Oakhurst?

I've done a lot of reading... but never have enough time to research - there's just so much to keep up with! If others would be interested, could be rewarding for all of us if we all took a little chunk and researched, brought back what we find, and discuss... helping each other make informed decisions.

[Chem101]

KK....

I learned a great investment tool from a radio program done by an investor named Doug Fabian.
On my 401K I invest in mutual funds. First I researched the funds I could use and looked for funds with good trends in the last 6 months. Then I compare fund performance against the 20 day and 50 day moving averages. As long as the fund is above the 50 day moving average, I'm fully invested. If the fund dips below the the 50 day moving average, I move the funds to a money market. This is real simple to watch on Yahoo Finance. Also I keep a sell discipline of moving to a money market any time a fund loses more then 7% of it's highest value. Using this technique, I've averaged about 18% gain per year for the last 3 years.

[Kahlua Kid]

Thanks Chem101.

We would listen to Doug Fabian from time-to-time, even subscribed to his newsletter... but I never really knew what to do with his info! Call me blonde !

[jakobscalpel]

I might be interested in an investment club, assuming everyone had roughly the same philosophy. Never done any investing with others, just on my own, but I've done alot.

[Kahlua Kid]

[QUOTE]Originally posted by Chem101:
Then I compare fund performance against the 20 day and 50 day moving averages. As long as the fund is above the 50 day moving average[QUOTE]

Which average? S&P? Dow? their specific class as in Mid-cap Growth? Small-Cap Value?

[Kahlua Kid]

Originally posted by jakobscalpel:
I might be interested in an investment club, assuming everyone had roughly the same philosophy. Never done any investing with others, just on my own, but I've done alot.

I've never been in an investment club either - but am game -

[jakobscalpel]

Originally posted by Kahlua Kid:
[QUOTE]Originally posted by Chem101:
Then I compare fund performance against the 20 day and 50 day moving averages. As long as the fund is above the 50 day moving average[QUOTE]

Which average? S&P? Dow? their specific class as in Mid-cap Growth? Small-Cap Value?

I imagine Chem101 is talking about the 20 and 50 day moving average of the mutual fund itself.

[Chem101]

KK,

Jakobscapel is correct. Pick a Mutual Fund, in Yahoo Finance, get the look up quote. Select the "Technical Analysis" Then you can select a number of graphical tools. I look at a 6 month graph and select the 50 day and 20 day moving average.
You can also go to Morningstar and see the rating of the fund against like funds.

[Kahlua Kid]

Thanks Guys! I'm honestly a novice who at least understands the terms.

Would love to learn more. I head out to Morningstar every now and then, and read Kiplinger, etc... but when it comes to figuring out what is best I get sidetracked, because I've ran the risk tolerance models, know most likely what I should be doing (and also know what our Investment guy says about our risk tolerance), yet when I see those 30% PYTD returns in certain funds, I hate sitting on my 10% returns (20% bonds/80% stocks)! And then I want to go for it.

I know with high returns, come high risk and high swings when the market heads south.

But with what Fabian has said over and over, and like you are doing Chem101, if you set your max. loss % allowed, and get out, then you cap your loss at that.

I got burned in late 90's when the Techs crashed. I put my entire bonus out there and within 2 weeks had lost 70% of it. Learned a lesson then about dollar cost averaging, and not necessarily hitting the hottest trend.

I've been more about capital preservation and moderate growth, than homeruns... but I'm only in my mid-30's... shouldn't I be still taking some higher risks?

[Chem101]

KK....

The moving average technique cuts off the valley's of a fund as it moves up and down in value. During a valley, you're not making money, but you're not losing it either. The hardest discipline is to keep your emotions out of it. Before I learned Fabian's technique, in 1999 I lost a bunch too. I let my emotions tell me "It can't keep going down"..... it did. I keep a list of Mutual Funds and bellweather stocks listed on my home page. I get a daily feel for what's happening in the market. If I see a downward trend I visit yahoo finance to check on the moving averages. Once it crosses the line... bang... I'm out. Once it goes above the line... I'm right back in. And the beauty of it is it's so simple.... doesn't really take any work. If I had learned this approach when I was 35.... I'd be in a lake front by now http://oakhurstonline.com/icon/wink3.gif

[Kahlua Kid]

I keep telling everyone I want a home at Bass Lake someday!

So... lets take Janus Overseas for instance - I know International can be risky due to currency fluctuations, political unrest, unsavory financial reporting... but... lets take a look at that one. (Recommended not to have over 5% of assets in Foreign... )

The graph for 50 days shows its ahead of the 50 day average - so this would be a hold for you right now? (Its averaged 30% YTD... in the past only 4% for a full year...) This is something I expect to hold for short-term... but using Fabian's rules, would get out the minute it falls below the 50 day average?

[Chem101]

KK

JAOSX has a good graph for the last 6 months. Looking at the last two years it does not appear to be a volitile fund. I'd ride the fund up and bail when it dips below the 50 day moving average. If and when it turns around you can jump back in. Buy and hold shouldn't be in your vocabulary. Why ride a fund down? You'll more then make up the transaction costs. Think about riding a fund down 10%. What would that cost you? Don't try to time the market. The moving average technique is an analytical tool. No crystal ball.... no guess work. It tells you when to stay put and when to move..... simple and effective. The only time it will bite your butt is if there is a large one day down turn. I have yet to find a tool to eliminate that risk. That's why in addition to the last 6 month chart I look at the 2 year chart to see if the fund is prone to such dips.

[Kahlua Kid]

Doing a little bit of self-directing again lately. Did so years ago and got socked because, well, I'm learning! (So we turned to an investment advisor about 5 years ago - but he takes a % for that.)

I've been very happy with Janus Overseas... only in 1 month and good return thus far.

Not so happy with Janus Triton - haven't lost any money, but flat.

Vanguard Overseas, pretty happy with.

Vanguard MidCap - a bit of growth.

I know 1 month is not even a blip of long enough to be making the above comments! But I just did!

Where is the market heading now? Seeking a different direction for some other funds. I don't want to be top heavy in overseas.

My Investment Advisor called and advised looking like smallcap by end of year will fizzle.

What have you heard?

[Chem101]

KK,

I already bailed on the small cap I was holding (SSMVX). I've been riding Fidelity's mid cap value up nicely (FMCSX). But again, I don't try to anticipate the market. I just following the moving average and let it tell me what to do and when. It's working well for me. Made 10% in Q1 06.

[jakobscalpel]

I think the market is heading back down again soon. You know, "Sell in May and stay away." However, I haven't changed any positions just yet. Probably in the next two weeks...

[Kahlua Kid]

Our investment guy is telling us the U.S. market is going to remain flat for the next 4 years... They are advising foreign investments...

Anyways, Countrywide Bank is paying 5.25% if invested through their Internet bank... pretty good for not locking your money up in a CD - that's even better than some current CD rates.

[Kahlua Kid]

Originally posted by Chem101:
KK,

I already bailed on the small cap I was holding (SSMVX). I've been riding Fidelity's mid cap value up nicely (FMCSX). But again, I don't try to anticipate the market. I just following the moving average and let it tell me what to do and when. It's working well for me. Made 10% in Q1 06.

How do you determine which funds to enter? I know you look at the averages.. but, there are so many, how do you determine which ones to check on and investigate the average? It would take days to look up all the funds.

[Chem101]

Well.... Most of my investment is in my company's 401K which only offers a couple dozen investment options. From a short list it is pretty easy to find the performers. If I were free to use any option I would most likely research ETF's. Certain sectors are still performing fine.

One of my friends just finished his retirement home in Coarsegold (by Rivergold School)I was visiting him last week and he was telling me his investment guy was telling him to consider municiple bonds short term. Some are paying at 5% tax free which isn't bad in a down market.

I'm still using the moving average to tell me to stay in or get out of the market. With this last down trend, the moving average told me to move to cash position very early... For those that stayed in... most lost all of the gain they made in Q1. By moving out, I've held on to a 10% gain made in Q1... no magic.. no emotion.
As far as predicting a flat market.... I don't have a crystal ball and refuse to make investments based on beliefs. The market will always go up and down. Take the ride when the tend is going up and step off when the trend goes down...... and don't get greedy http://oakhurstonline.com/icon/wink3.gif

[Chem101]

Do I sound like I'm repeating myself.... repeating myself?

Sorry... It's just that it's so simple. If I had known about this tool when I was younger.... I'd have a lake front now!

[Kahlua Kid]

Researching ETFs... low operational costs compared to mutual funds. A lot of potential in Asia - Japan? China may be a bubble about to burst. Energy seems like a no-brainer, but hasn't proven itself lately. But our company's 401k program doesn't have any - just mutual funds - but good names, Dodge & Cox, etc.

With housing bubble said to be bursting nationwide. Stocks predicted to remain flat- have been for last 7 years (but... using Chem's technique, I can see how you are riding the ups, bailing on the downs.)... I've got to get more pro-active here!

Looking into Gold or Oil perhaps... never have bought commodities before, but considering as we're going into an inflationary period (don't care if "they" say we aren't, I think we are), less consumer spending, home foreclosures are up, at war with terrorists, oil demand worldwide increasing...

I was told to stay away from REITs last year, and my one REIT fund returned 35% last year! I only put a little bit of my 401k allocation there. But 2007, I'm thinking this is the year to leave REITs. Will do the 50 day average check!

What are you all thinking out there?

[Yosemite_Wolf]

When it comes to my 403b/401k I keep my funds in the same place. I once considered moving things around a bit but decided against it. I mean, the 403b is a long term investment... and not meant to take cash out early. So I leave mine where it is. I have a really (had) good investments guy with Valic.... who used an awesome formula. Unfortunate for me, he moved on to a higher position http://oakhurstonline.com/icon/sad3.gif. Ive been putting money into my acct for 7 years.... starting with 0.. and now have 30K invested.

not bad for just pennies taken from my paycheck before taxes. (thats 30 K that woulda been sucked up by the IRS otherwise)