Hi JIT,
congrats on at least having thought thru a strategy that may apply to you. You are already light years ahead of those that don't think at all and pray and hope that the insto's managing their industry fund will perform.
Here's an exceprt from a piece that came to me today:
Why ‘buy and trade’ beats ‘buy and hold’
While last year’s more bullish market was all about buy-and-hold, Schellbach says 2010 and 2011 is a time for nimble investors to capitalise on corrections.
To Schellbach that means buying on the dips and locking in gains on the rallies. If, as he suspects, trading ranges are as wide as 15 percent intra-month or 3 per cent intra-day, he argues that there will be no shortage of buy-and-trade opportunities.
Assuming there’s a lot more volatility in store, Oliver says default strategies deployed by investors during the market’s 17-year bull-run – when it was safe to buy-and-hold virtually anything – will be less profitable. Oliver says investors might consider capitalising on opportunities provided by extreme swings in sharemarkets - such as those experienced late in 2008 and early 2009 - over a one-to three-year horizon.
According to Tim Schroeders, fund manager with Pengana Capital, investors who don’t regularly rebalance their investment portfolios within such a volatile market risk missing out on buying opportunities. But investors must find a happy medium between over trading their portfolio and sitting on their hands. “They need to ponder how much of their portfolio should be given over to exploiting market opportunities through a disciplined framework that can consistently maximise returns,” says Schroeders. “That means thinking beyond the mindset that they’ve got just one primary investment pool.”
Over a longer investment horizon, Leaning says a buy-and-hold strategy still adds value. But like Schroeders, he also urges investors to allocate part of their non-core holdings to playing shorter and more volatile swings.
“When the market was at 3,300 points - which put forward PE multiples on Australian equities at around 9 times - a buy-and-hold strategy clearly made more sense than today,” he says.
Nevertheless, he says one way play the current cycle is to sell down or reduce exposure to certain income-bearing stocks that may have lost value over recent months in favour of those offerings greater growth upside. “We advocate investors overlay the technicals over fundamentals, and another strategy is to hedge their portfolio with options,” he says.
Perhaps use the term trade loosely and employ a term that Alan Hull uses that I also like.....Active Investing.
Here's the link to the whole article:
http://www.thebull.com.au/articles/...r-a-rally,-or-is-the-bear-market-upon-us.html
Nothing wrong with buy and hold however with just a little extra work and prudence, you may avoid the opportunity loss/cost of having to ride the large dips and sideways recoveries when you could have locked in profits to a degree (and paid tax) and remained in a safer class such as cash awaiting more opportunities. This period sometimes lasts years.
I'm not gonna go into an full blown treatise about dollar cost averaging up or down, just merely presenting my view also.
FWIW my SMSF aside from significant property holdings, has some cash. I have not re-entered the stock market as yet. I do not trade, however did take all money out of the market in June 2008. Perhaps foolishly I did not re-enter last year around July would have certainly seen a ride of the uptrend, however would have required exiting before the new year to avoid the volatility that 2010 has brought and the largely sideways tendancy we are seeing in an overall sense.
Others do well riding the ups and downs, by channel trend surfing. Horses for courses. Consider all opinions and views and do what suits your temperament and style.
BTW, are you sure you (at your young age) will be able access(even some) super at 55?
congrats on at least having thought thru a strategy that may apply to you. You are already light years ahead of those that don't think at all and pray and hope that the insto's managing their industry fund will perform.
Here's an exceprt from a piece that came to me today:
Why ‘buy and trade’ beats ‘buy and hold’
While last year’s more bullish market was all about buy-and-hold, Schellbach says 2010 and 2011 is a time for nimble investors to capitalise on corrections.
To Schellbach that means buying on the dips and locking in gains on the rallies. If, as he suspects, trading ranges are as wide as 15 percent intra-month or 3 per cent intra-day, he argues that there will be no shortage of buy-and-trade opportunities.
Assuming there’s a lot more volatility in store, Oliver says default strategies deployed by investors during the market’s 17-year bull-run – when it was safe to buy-and-hold virtually anything – will be less profitable. Oliver says investors might consider capitalising on opportunities provided by extreme swings in sharemarkets - such as those experienced late in 2008 and early 2009 - over a one-to three-year horizon.
According to Tim Schroeders, fund manager with Pengana Capital, investors who don’t regularly rebalance their investment portfolios within such a volatile market risk missing out on buying opportunities. But investors must find a happy medium between over trading their portfolio and sitting on their hands. “They need to ponder how much of their portfolio should be given over to exploiting market opportunities through a disciplined framework that can consistently maximise returns,” says Schroeders. “That means thinking beyond the mindset that they’ve got just one primary investment pool.”
Over a longer investment horizon, Leaning says a buy-and-hold strategy still adds value. But like Schroeders, he also urges investors to allocate part of their non-core holdings to playing shorter and more volatile swings.
“When the market was at 3,300 points - which put forward PE multiples on Australian equities at around 9 times - a buy-and-hold strategy clearly made more sense than today,” he says.
Nevertheless, he says one way play the current cycle is to sell down or reduce exposure to certain income-bearing stocks that may have lost value over recent months in favour of those offerings greater growth upside. “We advocate investors overlay the technicals over fundamentals, and another strategy is to hedge their portfolio with options,” he says.
Perhaps use the term trade loosely and employ a term that Alan Hull uses that I also like.....Active Investing.
Here's the link to the whole article:
http://www.thebull.com.au/articles/...r-a-rally,-or-is-the-bear-market-upon-us.html
Nothing wrong with buy and hold however with just a little extra work and prudence, you may avoid the opportunity loss/cost of having to ride the large dips and sideways recoveries when you could have locked in profits to a degree (and paid tax) and remained in a safer class such as cash awaiting more opportunities. This period sometimes lasts years.
I'm not gonna go into an full blown treatise about dollar cost averaging up or down, just merely presenting my view also.
FWIW my SMSF aside from significant property holdings, has some cash. I have not re-entered the stock market as yet. I do not trade, however did take all money out of the market in June 2008. Perhaps foolishly I did not re-enter last year around July would have certainly seen a ride of the uptrend, however would have required exiting before the new year to avoid the volatility that 2010 has brought and the largely sideways tendancy we are seeing in an overall sense.
Others do well riding the ups and downs, by channel trend surfing. Horses for courses. Consider all opinions and views and do what suits your temperament and style.
BTW, are you sure you (at your young age) will be able access(even some) super at 55?
