Is the market just that bad?

[TK2fast]

I've been a 101 stock investor for many years and was doing ok until I followed the TI plan. I am 70 years old and began here at Tactical Investing one year ago. I have followed the "rules" as close as possible, but in that time I am 13K in the red. Is it just the market is that bad? What have others experienced? I am very curious as I thought the signal from TI was that the last quarter of the year we were to see a major pullback. Obviously it has happened a whole lot sooner.
I am not a savvy investor like many here so don't rip me a new one. Not pointing fingers but trying to understand.

[MarkD]

imo, manipulation has overtaken logic. But that's just one individual perspective.

[Yodean]

I've been a 101 stock investor for many years and was doing ok until I followed the TI plan. I am 70 years old and began here at Tactical Investing one year ago. I have followed the "rules" as close as possible, but in that time I am 13K in the red. Is it just the market is that bad? What have others experienced? I am very curious as I thought the signal from TI was that the last quarter of the year we were to see a major pullback. Obviously it has happened a whole lot sooner.
I am not a savvy investor like many here so don't rip me a new one. Not pointing fingers but trying to understand.

Markets are unpredictable. A lot of the TIT's predictions did not come true, while a few did, and there were numerous predictions that contradicted previous predictions, followed by subsequent predictions that reverted back to the original predictions, and so forth.

And of course, constant newer predictions to explain why the old completely wrong predictions were actually right, but delayed - or "sped up" because of "changes in cycles," and altered because of different coloured Swans, etc.

Constant new experimental methods of sentiment and technical analyses, lots of colourful charts/graphs ...

Anybody who followed the TIT's recommendations this year, in all honesty, would have lost money. Some have lost a lot, while others a bit less.

But this is also true for many other financial services, subscriptions, etc.

No one knows the future. One does not profit by following a prophet, or blindly following someone who acts like one.

It is what it is.

Take the parts of the TIT methodology that work for you, and puke out the rest. Get a big bucket ready.

Develop your own style, make your own mistakes - when you make your own mistakes, at least you'll learn from them faster.

Risk management, long-term CAGR are most important. Not discussed enough here, goes beyond "cash allocation" and buying a few puts. I go elsewhere for that stuff.

[Cinnamon]

imo, manipulation has overtaken logic. But that's just one individual perspective.

I agree Mark. The manipulation has been out of this world. They lie with impunity on every single topic. It adds to the already challenging terrain and it will wreak havoc with short term forecasts

I think too many individuals here and to some degree you are also doing it Yodean, keep pointing out only the short term call and not the long term call. Short term calls are subject to change based on events. And yes the short term calls were not good this year, but show me which service is doing great this year.

One year does not determine a trend. As someone pointed out, to a degree they even got the short term rally right. Did you know that the rally from June to August was the strongest rally of the year. On the negative side, it was not strong enough to lift most of our plays into the black.

However, its the long term calls that count the most. TI's long term call, which is what any service should be really judged on was spot on for this year, and very good for last year and 2020, etc. Moreover their historical record is quite excellent.

As for this year, I don't know one service that is up and I follow around 4.
Even the guy from England many follow from here, missed a few calls and overall following his stance your portfolio would be down a lot and he is a lot better than many out there. COIN Is smashed and lot of his recos are down over 50%. This year has been tough on everyone.

Pertaining to risk management, the rules are pretty decent. Divide money into lots, only invest equal sums into each play (this is a critical rule that very few services discuss), take profits along the way, Determine your risk level, and always keep cash on hand. If anyone follows these simple rules they would generally be fine.

Some negatives or unnecessary stuff
Perhaps some of the imagery was unnecessary like the push, shove, thrust, etc.

Things that can be done to improve the service

Clearly separate long and short term calls
Remind individuals that we are entering a volatile phase, so those with lower risk tolerances might have the option to build up cash.
Perhaps reduce the number of new plays


I fired Team TI and email with some of the above suggestions. I will post a follow up when i get a response


Could TI implement features to make things easier? Yes they could and so could almost every other service. In short, we as humans will always find something to criticize about any service, it's in our nature.

[harryg]

Most were long. Markets went down. Lost money. No need to make it more complicated than that.

Yodean told me of a chap who 'predicted' this year, put on hedges, but is still down 40%. It's tricky.

TI have been very responsive and supportive on the forums and seem to show some self-awareness and willingness to adapt.

Even the guy from England many follow from here, missed a few calls and overall following his stance your portfolio would be down a lot and he is a lot better than many out there. COIN Is smashed and lot of his recos are down over 50%.

That chap is so imbued with his own marvellousness that if he predicted a dry day, he would be more than capable of standing in the torrential rain telling you that he is not getting wet.

[nicolas]

While I agree with Yodean’s take on developing one’s own style of investing over time, this is a life-long process that not everyone is either interested in or built for.

If one’s goal is just to do better than passive indexing over time, a simpler and less involved approach will do. And TI subscribers are in luck.

I joined in 2019 and have some older market updates going back to 2016. With that, I was able to estimate the past performance of the Market Update, focusing on the main Trend portfolio (both primary and secondary candidates.) Note that I used assumptions and made some simplifications, which overall I believe tend to underestimate the performance. I also only considered realized profits and losses on the year when the full position is closed. So, bear in mind those are back-of-the-napkin kinds of numbers for my own due diligence only. Maybe subscribers who've been with TI longer than I can confirm if it aligns with their own results.

So, looking at 2016-2021, I estimate the main Trend portfolio had a CAGR of about 25%, versus 15% for SPY as a benchmark. Past performances are no guarantee for future results, but 6 years is enough data to assess how the service is doing.

Now, if I look at my follow-up file for 2022, I have a breakdown of the YTD returns (note: I calculate returns on my weighted capital invested, so it doesn’t account for cash positions since I don’t have a fixed portfolio size, also, honestly, I don’t know how to calculate it differently!)

My Trend PF sits at -12%. Much better than SPY at -23%!
My Medium-to-High-Risk plays stand at -19%, which makes sense as they have a higher risk, yet still beat the index.

What really drags my performance this year is the ETF portfolio at -31%. Because of the secondary candidates in this portfolio. Leveraged ETFs work both ways. And AFRM got crushed. I decided to take part in these plays, but one could easily have avoided these losses by sticking to lower-risk candidates.

So, my advice would be to just be confident that over time, the Trend portfolio, and the methodology behind it, will beat passively investing in an index fund. And to follow the recommendations without worrying about short-term performance (which, as I pointed out above, is actually quite good even this year!)

There are minor adjustments one can experiment with. Sol has discussed some like raising stop losses to the entry point after a stock shows 20-30% profit.

Another one is that I used to set a limit buy order at the upper threshold of the range. If the instruction was “deploy 1/4th in 14-16 range”, I’d set a GTC order at 16 and forget about it. This year, I’ve tried taking advantage of the volatility putting the order at 14. If I see the stock hovering inside the buy range above my limit, I can decide to buy it there, but most of the time I’ve been filled at the lower end of the range. This helped reduce my cost basis by a few %.

I also tend to close positions below the targets. Mostly because I’m low on cash so for me, right now, raising cash faster comes at a premium to squeezing all the juice.

[Budge]

I've been through a number of ups and downs in the markets and, not for the first time, I'm down 50% and I'll not be surprised if the markets drop more. Nothing I say will ease any pain you may be feeling but shit happens. Get over it. Focus on how you move on from here to become a better trader/investor or just avoid the markets altogether and recoup/regroup.

[Cinnamon]

Most were long. Markets went down. Lost money. No need to make it more complicated than that.

Yodean told me of a chap who 'predicted' this year, put on hedges, but is still down 40%. It's tricky.

TI have been very responsive and supportive on the forums and seem to show some self-awareness and willingness to adapt.

Even the guy from England many follow from here, missed a few calls and overall following his stance your portfolio would be down a lot and he is a lot better than many out there. COIN Is smashed and lot of his recos are down over 50%.

That chap is so imbued with his own marvellousness that if he predicted a dry day, he would be more than capable of standing in the torrential rain telling you that he is not getting wet.

You do have a way with words Harry. I was trying to be polite. I guess if was being satirical I could state that he is quite humble

[Cinnamon]

While I agree with Yodean’s take on developing one’s own style of investing over time, this is a life-long process that not everyone is either interested in or built for.

If one’s goal is just to do better than passive indexing over time, a simpler and less involved approach will do. And TI subscribers are in luck.

I joined in 2019 and have some older market updates going back to 2016. With that, I was able to estimate the past performance of the Market Update, focusing on the main Trend portfolio (both primary and secondary candidates.) Note that I used assumptions and made some simplifications, which overall I believe tend to underestimate the performance. I also only considered realized profits and losses on the year when the full position is closed. So, bear in mind those are back-of-the-napkin kinds of numbers for my own due diligence only. Maybe subscribers who've been with TI longer than I can confirm if it aligns with their own results.

So, looking at 2016-2021, I estimate the main Trend portfolio had a CAGR of about 25%, versus 15% for SPY as a benchmark. Past performances are no guarantee for future results, but 6 years is enough data to assess how the service is doing.

Now, if I look at my follow-up file for 2022, I have a breakdown of the YTD returns (note: I calculate returns on my weighted capital invested, so it doesn’t account for cash positions since I don’t have a fixed portfolio size, also, honestly, I don’t know how to calculate it differently!)

My Trend PF sits at -12%. Much better than SPY at -23%!
My Medium-to-High-Risk plays stand at -19%, which makes sense as they have a higher risk, yet still beat the index.

What really drags my performance this year is the ETF portfolio at -31%. Because of the secondary candidates in this portfolio. Leveraged ETFs work both ways. And AFRM got crushed. I decided to take part in these plays, but one could easily have avoided these losses by sticking to lower-risk candidates.

So, my advice would be to just be confident that over time, the Trend portfolio, and the methodology behind it, will beat passively investing in an index fund. And to follow the recommendations without worrying about short-term performance (which, as I pointed out above, is actually quite good even this year!)

There are minor adjustments one can experiment with. Sol has discussed some like raising stop losses to the entry point after a stock shows 20-30% profit.

Another one is that I used to set a limit buy order at the upper threshold of the range. If the instruction was “deploy 1/4th in 14-16 range”, I’d set a GTC order at 16 and forget about it. This year, I’ve tried taking advantage of the volatility putting the order at 14. If I see the stock hovering inside the buy range above my limit, I can decide to buy it there, but most of the time I’ve been filled at the lower end of the range. This helped reduce my cost basis by a few %.

I also tend to close positions below the targets. Mostly because I’m low on cash so for me, right now, raising cash faster comes at a premium to squeezing all the juice.

Nicolas, thank you for taking the time to do all these calculations and provide a balanced view. I am going to use rallies to trim some of my positions as I need money to get into some Gold and copper plays. Plus I want to have at least 15% in cash

The leveraged ETF''s pushed me down also, but they do produce spectacular gains when the market takes off. I bought more TQQQ on the way down. If this rally lasts 1-2 weeks I should be in the black

[Do-or-Die]

I've been through a number of ups and downs in the markets and, not for the first time, I'm down 50% and I'll not be surprised if the markets drop more. Nothing I say will ease any pain you may be feeling but shit happens. Get over it. Focus on how you move on from here to become a better trader/investor or just avoid the markets altogether and recoup/regroup.

I whole hardheartedly agree, especially with the part that nothing anyone can say will make things better. The only thing that helps or can play a pivotal role, is experience. Actually going through an up and down phase. This experience helps you understand that the pain stage is temporary.

[TK2fast]

Thank you all for the great feedback. It is very interesting and helpful.

[djanderle]

As of today (before markets close) I'm down 49%
Unless someone says there is a market turn around coming soon (1-month) I will be selling everything so that I have ammo for the next move up.

I know there is no crystal ball...right now the Plunder down Under guy looks pretty prescient.

[gnosis12]

Here’s how ‘rare’ S&P 500’s ‘violent’ reversal was after Thursday’s inflation report — and what history shows may come next, according to Bespok


“There were only nine other days since 1983 when the S&P 500 fell more than 2% intraday but finished the day up over 2%,” said Bespoke. “The most recent occurrence was over eleven years ago on 10/4/11 and before that, there were five separate occurrences in 2008 alone!”




BESPOKE INVESTMENT GROUP
The chart above shows the remaining large reversals were in 1987, 1997 and 2002.

“We’re not sure when or where the ultimate bottom in stocks will end up, but violent moves like yesterday tend to occur closer to lows than highs,” said Bespoke.

“One year later, though, performance was much more consistent with an average gain of 14.6% (median: 19.4%) and positive returns eight out of nine times,” Bespoke wrote. “People usually forget that long-term rallies emerge out of chaos where investors become increasingly convinced that the only viable path if any exists at all, is lower.”

https://www.marketwatch.com/story/heres ... eid=yhoof2

What happened on Thursday falls under the unusual to exciting category. it suggests that perhaps the worst might be behind us and that the next decline while sharp might not lead to a new low?

Was down up 47% up to 1 month ago. Aggressively started to sell puts and reduced the loss to 35%. This is based on invested funds. I have a cash position of 27% now, after closing most of my puts yesterday towards the end of the day, so the put premiums really dropped. I always keep cash on hand and move into 20% or more when the markets is overbought on the monthly charts.

Despite the paper loss, overall my portfolio is still up by a large factor from 2019, 2020, and 2021 gains.

[LoriPrecisely]

As of today (before markets close) I'm down 49%
Unless someone says there is a market turn around coming soon (1-month) I will be selling everything so that I have ammo for the next move up.

I know there is no crystal ball...right now the Plunder down Under guy looks pretty prescient.

Plunder called it correctly last month, also.
The election in November will shake up the markets.
We will trend upwards sometime in the future, so don't give up hope.

[Triplethought]

I've been a 101 stock investor for many years and was doing ok until I followed the TI plan. I am 70 years old and began here at Tactical Investing one year ago. I have followed the "rules" as close as possible, but in that time I am 13K in the red. Is it just the market is that bad? What have others experienced? I am very curious as I thought the signal from TI was that the last quarter of the year we were to see a major pullback. Obviously it has happened a whole lot sooner.
I am not a savvy investor like many here so don't rip me a new one. Not pointing fingers but trying to understand.

I can tell you I made good money in 2020 and I give SOL and team credit to give me the courage to jump in shortly after the COVID bottom when it was not at all obvious to me the trend would be back. I have given it all back in 21 and 22 following the TI program. I was $150K up and now have lost $150K since early 2021. So yes, IMO SOL lost a bit Mojo for sure. But I'd say it's mostly market conditions and prolonged downturn. Say 90% of our losses due to a very down market and 10 or 15% bad stock picks and options plays by TI. I believe TI was overly aggressive into tech (nasdaq) and marginal companies (Marijuana etc) based on chart patterns and market psychology and not based on fundamentals. But the bigger sin is not following the "fight the Fed" advise.

This question is similar to my question about market trend green arrow at top of newsletter still being up the entire time. Several people posted long term charts showing over years the market is going up despite the jog down this year. SOL replied similarly saying over long periods of time the market is up. I find this answer a bit of a cop out as such a statement is a big "no shit sherlock" and one of the big things we all look for TI to do is data that let us sell when downturns are coming. That was a fail. However, I also realize that no one has a crystal ball. Because SOL has always been so positive and bullish, when he started backing off on buys and saying the last quarter would have a downturn I decided in mid august to ignore his optimistic exit levels and sell anything and everything that was either green or only slightly red. This left me with a portfolio full of turkeys but I'm 60% out right now. I've decided "don't fight the FED" is the advice I will follow to guide my re-entrance into the market. It means I will probably buy back in AFTER the market has begun it's upswing but I'm OK missing the bottom by a little.

I would hold those loses thru this downturn (that's what I'm doing with the turkeys) and let them ride out the other side.

Having said this I plan to follow SOL's buy levels when the time comes to work back in. However this time I will also be allocating a bigger chunk of the portfolio to index funds where I don't have to actively manage. At this point I believe in the Vogel advice... that it's hard for an individual investor to beat the market so buy and hold index. But I plan to still dabble to see if Im wrong and I suspect strongly SOL will get his Mojo back.