Author Topic: Buying Stock based on share price and time of day (market open/close)  (Read 2823 times)

Dragonstrike

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Hello everyone.

I was hoping someone could clarify this for me.  A friend of mine has gotten me in touch with a very knowledgeable investor who buys/sells stock on the side.  I looked into his track record, and he is managing at least a 17-20% return rate every quarter based on his market trend analysis.

He says the key is merely making trades for TSP and Roth's around certain months of the year.

I'm going to try this with my TSP, as it gains the most value when just doing the switch between the G and S funds. 

However, to clarify on this, I'm trying to understand how I can look at the market, buy when the price is low, and sell when its high to follow this trend he has showed me.

I don't understand how to lock in stock prices when buying from Hawaii online.  I know the market opens at 9:30am EST and closes at 4pm, but from Hawaii that's like 3:30am to 12pm. 

How do I benefit from the time zone and locking in the stock share price?

Indexer

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This is going to come off as harsh. I'll apologize in advance for that.

If you don't understand how to trade stocks yet you shouldn't be doing this. Day trading and market timing are hard to properly pull off for professionals with years of education/experience.

I'm not even sure how you trade stocks at certain times of the day in a TSP. I believe the TSP funds all trade like traditional mutual funds, which is at the end of the day. You can do a trade at 9:30am. You get the price at 4pm. There isn't a way around this with mutual funds.

Dragonstrike

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This is going to come off as harsh. I'll apologize in advance for that.

If you don't understand how to trade stocks yet you shouldn't be doing this. Day trading and market timing are hard to properly pull off for professionals with years of education/experience.

I'm not even sure how you trade stocks at certain times of the day in a TSP. I believe the TSP funds all trade like traditional mutual funds, which is at the end of the day. You can do a trade at 9:30am. You get the price at 4pm. There isn't a way around this with mutual funds.


Its not harsh, so I don't take it as bad criticism.

I'm trying to understand the basics of this stock trade essential is all. I'm not rushing into anything.  Mostly, this is something for shifting funds on certain days, no more than twice a month, in the TSP G and S funds. 

MustacheAndaHalf

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I looked into his track record, and he is managing at least a 17-20% return rate every quarter based on his market trend analysis.
This friend is doubling his money every year, and doesn't earn less than 17% or more than 20% in a quarter?  I think there's some false information involved, intentional or otherwise.  Also, a "track record" shows past purchases to outside parties in a way they can't be altered later.  If you're simply trusting someone to report on themselves, that's not a track record.  That's some personal notes.

The thing which should have aroused suspicion of Madoff was his 12% a year returns every year.  If there's high returns with no volatility, there's false information.  You simply can't get 100% per year returns without volatility, let alone 12% per year.  So I wouldn't touch this investment.

Can traders beat the market for years? Yes.  But before they do, you can't predict it.  You don't know if you've got George Soros running the Quantum Fund or Nobel prize winners running Long Term Capital Management.  Before the fact, predicting the winning managers is as hard as predicting the winning funds or stocks.

Dragonstrike

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Ok, so I got a few things wrong, let me clarify:

"17-20% return over a year, based on SEASONAL TSP fund buying and selling"

Link here:  www.tspcenter.com

I'm still trying to understand this as well so bear with me.

Indexer

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Ok, so I got a few things wrong, let me clarify:

"17-20% return over a year, based on SEASONAL TSP fund buying and selling"

Link here:  www.tspcenter.com

I'm still trying to understand this as well so bear with me.

Wait, did someone on that site say they had those returns?

This is going to sound like a contradiction(or is a paradox?).... don't trust what people post about investments on internet forums.

Here, read this... https://personal.vanguard.com/us/insights/investingprinciples

Figure out an asset allocation that makes sense for you. Be diversified, low cost, and stick to it. If someone on the internet says they have a magic pill/algorithm/computer models/etc. that can get you better than average returns go back to https://personal.vanguard.com/us/insights/investingprinciples.

Now if you read what I posted you know not to trust me. ;) 

So instead trust MMM, Warren Buffet, John Bogle, and a host of other people who would all tell you to read https://personal.vanguard.com/us/insights/investingprinciples. They even have a tool you can play with that will help you build a portfolio. https://personal.vanguard.com/us/funds/tools/recommendation  It obviously recommends Vanguard funds, but most of the those Vanguard funds correspond with similar funds in the TSP.

Dragonstrike

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Ok, so I got a few things wrong, let me clarify:

"17-20% return over a year, based on SEASONAL TSP fund buying and selling"

Link here:  www.tspcenter.com

I'm still trying to understand this as well so bear with me.

Wait, did someone on that site say they had those returns?

This is going to sound like a contradiction(or is a paradox?).... don't trust what people post about investments on internet forums.

Here, read this... https://personal.vanguard.com/us/insights/investingprinciples

Figure out an asset allocation that makes sense for you. Be diversified, low cost, and stick to it. If someone on the internet says they have a magic pill/algorithm/computer models/etc. that can get you better than average returns go back to https://personal.vanguard.com/us/insights/investingprinciples.

Now if you read what I posted you know not to trust me. ;) 

So instead trust MMM, Warren Buffet, John Bogle, and a host of other people who would all tell you to read https://personal.vanguard.com/us/insights/investingprinciples. They even have a tool you can play with that will help you build a portfolio. https://personal.vanguard.com/us/funds/tools/recommendation  It obviously recommends Vanguard funds, but most of the those Vanguard funds correspond with similar funds in the TSP.

@Indexer, thanks for the material, I'll look into it when I have free time this week.  Quick question though:  as far as VTSAX for vanguard as JPcollins and bogle/MMM suggest, is it a taxable brokerage VTSAX fund or a Roth VTSAX?

Indexer

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You can put VTSAX in a brokerage, Roth, or traditional IRA. Which account you want to use is more of a tax question.

It is hard to predict future tax laws, but a general rule of thumb is that if you are in a low tax bracket it is a good idea to take advantage of a Roth to lock in those low taxes. If you are in a higher bracket the traditional looks better.

If this money is being put away for the long term maxing out your Traditional IRA or Roth before contributing to a taxable brokerage is normally a good idea.

Dragonstrike

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You can put VTSAX in a brokerage, Roth, or traditional IRA. Which account you want to use is more of a tax question.

It is hard to predict future tax laws, but a general rule of thumb is that if you are in a low tax bracket it is a good idea to take advantage of a Roth to lock in those low taxes. If you are in a higher bracket the traditional looks better.

If this money is being put away for the long term maxing out your Traditional IRA or Roth before contributing to a taxable brokerage is normally a good idea.

So how is it that you have a Roth IRA with Vanguard, as suggested by MMM and other financial enthusiasts, but normally you can't touch that money until 59 1/2 old? Is it including the hits if you withdraw early?  Or is it feasible towards a brokered account Vanguard VTSAX fund where you have more potential of taking the money out?

Kaspian

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As long as you *fully* realize you might have a friend telling you about their wins and not their losses?  A gambler will tell you when they won $4000 but not that they lost $6000 a few months earlier.  This is very common.  Also, if a gambler admits they lost $2000, you will find out in actuality that it was closer to $8000.   Day trading is far, far more like gambling than it is investing.  Pearls of wisdom from a day trader source should always be taken with a huge chunk of rock salt.

MustacheAndaHalf

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Re: Buying Stock based on share price and time of day (market open/close)
« Reply #10 on: July 05, 2016, 11:51:06 PM »
...
So how is it that you have a Roth IRA with Vanguard ... but normally you can't touch that money until 59 1/2 old? Is it including the hits if you withdraw early?
Although you directed your question elsewhere, let me correct something: The growth of a Roth IRA has restrictions on when it can be withdrawn.  But the after-tax dollars you put in a Roth IRA can be withdrawn without waiting to 59.5, and without any tax impact.  There may be some 5 year rules kicking in, depending on the situation, so I'll provide an example that ignores the special case:

You contribute $5,500 to a Roth IRA... over 8 years it grows to $8,000.  At that point you can withdraw the $5,500 you contributed.  No tax owed.  The remaining $2,500 that grew in the account has the restrictions you're worried about.  Someone people use Roth IRA as an emergency fund because it's so flexible.

Telecaster

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Re: Buying Stock based on share price and time of day (market open/close)
« Reply #11 on: July 06, 2016, 12:15:54 AM »
Hello everyone.

I was hoping someone could clarify this for me.  A friend of mine has gotten me in touch with a very knowledgeable investor who buys/sells stock on the side.  I looked into his track record, and he is managing at least a 17-20% return rate every quarter based on his market trend analysis.

He says the key is merely making trades for TSP and Roth's around certain months of the year.

Bullshit.


Dragonstrike

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Re: Buying Stock based on share price and time of day (market open/close)
« Reply #12 on: July 06, 2016, 01:35:30 AM »
As long as you *fully* realize you might have a friend telling you about their wins and not their losses?  A gambler will tell you when they won $4000 but not that they lost $6000 a few months earlier.  This is very common.  Also, if a gambler admits they lost $2000, you will find out in actuality that it was closer to $8000.   Day trading is far, far more like gambling than it is investing.  Pearls of wisdom from a day trader source should always be taken with a huge chunk of rock salt.

I was speculating rather than jumping head first into the whole idea lol.  I know there are gives and takes to this all, and I'm still trying to ingest it all.  Its just that the more and more money I pump into my VTSAX fund, and have the distributions, if any, returned to buying more of the stock, and with the market always doing its thing, I find it hard to retire on that.

Again, let me clarify the work on the TSP trading.  Its moving between the G fund and the S fund.  Goal is to make an average return of 4 percent a month or 4 percent a quarter, whichever timing shows to be the best.  So average of 3 months, selling when highest peak, and buying when lowest.  I currently have all my earnings in the G fund, about 12k.

When the market dips again, all I do is, depending on tspcenter community advice and watching the Dow Jones Total Stock Market US Completion Index, (or DWCPF) I can push the funds into the opposite S fund at its lowest, and increase my buying potential for when it peaks again. If I miss the trade date trend, then all it becomes is holding till when it balances again, and redoing the cycle.

I've already made a 3% increase from merely trading last month before July 4th.  I put 50/50 into the two funds, and then pushed everything today into my G fund.  If I made the trade a day earlier, I would have had the 4% minimum return and would have been fine otherwise.