Author Topic: Welp, I'm going to take a stab at timing the market  (Read 117100 times)

secondcor521

  • Magnum Stache
  • ******
  • Posts: 4041
  • Age: 52
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Welp, I'm going to take a stab at timing the market
« Reply #750 on: February 06, 2021, 08:05:09 PM »
Don't forget about taxes.

If this were in a taxable account he would probably owe some amount of federal capital gains tax on the 2/7/2019 and 3/27/2020 sales, possibly at short term rates.  Plus probably state income taxes.

He would also owe ordinary income taxes on his Ally savings account interest, again at the federal and state level.

He did avoid income taxes on the dividends he didn't receive. :)

A LTBH person would only owe taxes on the dividends, but probably at the qualified dividend rate, which can be as low as 0% plus state taxes, and at worst is probably 15% plus state taxes.

talltexan

  • Magnum Stache
  • ******
  • Posts: 4576
Re: Welp, I'm going to take a stab at timing the market
« Reply #751 on: February 08, 2021, 09:17:59 AM »
It's probably unfair for us to speculate about taxes, because OPs tax situation could have changed for reasons unrelated to the project (like getting a much higher-paying job, or getting married to a spouse with a very different tolerance for risk).

bthewalls

  • Bristles
  • ***
  • Posts: 341
  • Location: ireland/northern ireland
Re: Welp, I'm going to take a stab at timing the market
« Reply #752 on: February 11, 2021, 04:53:56 PM »
Itís really good to read the maths behind this......very convincing

v8rx7guy

  • Handlebar Stache
  • *****
  • Posts: 2331
  • Age: 36
  • Location: Bellingham, WA
Re: Welp, I'm going to take a stab at timing the market
« Reply #753 on: February 11, 2021, 05:26:02 PM »
Itís really good to read the maths behind this......very convincing

This is my first time using a spreadsheet that I set up for this and I had an issue with the dividends formula.  Should be fixed now.

JAYSLOL

  • Handlebar Stache
  • *****
  • Posts: 1497
Re: Welp, I'm going to take a stab at timing the market
« Reply #754 on: February 12, 2021, 07:51:33 AM »
Ouch.  This really highlights that when market timers ďwinĒ, they actually lose. 

Wintergreen78

  • Bristles
  • ***
  • Posts: 426
Re: Welp, I'm going to take a stab at timing the market
« Reply #755 on: February 14, 2021, 01:49:38 PM »
Itís really good to read the maths behind this......very convincing

This is my first time using a spreadsheet that I set up for this and I had an issue with the dividends formula.  Should be fixed now.

I personally love this approach to evaluating trades, no need to get into a big theoretical discussion, just look at the numbers.

So, as far as I can tell his initial $60,354 would be $89,323 based on price appreciation alone. How much would it be after dividends are included?

talltexan

  • Magnum Stache
  • ******
  • Posts: 4576
Re: Welp, I'm going to take a stab at timing the market
« Reply #756 on: February 16, 2021, 11:27:41 AM »
Man, it's really interesting going back to the early days of this thread and re-reading the stuff about Donald Trump being taken down by the Mueller investigation.

Getting the stock market right is hard. Gaming out the cause and effect in modern American politics has also been difficult. One year ago this week it looked like Sanders was coasting to the Democratic nomination.

v8rx7guy

  • Handlebar Stache
  • *****
  • Posts: 2331
  • Age: 36
  • Location: Bellingham, WA
Re: Welp, I'm going to take a stab at timing the market
« Reply #757 on: April 16, 2021, 09:46:47 AM »
junioroldtimer sold 892.949 shares on Feb 7, 2019 at $67.59 each converting $60,354.43 into cash

junioroldtimer purchased 907.167 shares on Mar 13, 2020 at $66.14 each for gain in position of $1,294.78

However, he missed out on dividends totaling $1,282.58 during this time, for a market timing gain of $12.20 .  he had the initial $60,354.43 invested in an Ally savings account for that same ~1 year at a rate of 2.3% compounded monthly for a gain of $1,402.88 .

This brings the total position gain of "Market timing attempt #1" to be a gain of $1,415.08

Next, junioroldtimer sold 469.41 shares on Mar 27, 2020 at $63.91 each converting $30,000 into cash.

On Jun 5, 2020 the closing price was $78.85, meaning he had cost himself $7,012.99 after 10 weeks.
On Sep 1, 2020 the closing price was $87.08 meaning he had cost himself $10,876.23 plus $159.08 in dividends after 23 weeks
On Nov 19, 2020 the closing price was $89.66 meaning he had cost himself $12,087.31 plus $312.06 in dividends after 34 weeks
On Feb 5, 2021 the closing price was $99.32 meaning he had cost himself $16,621.81 plus $489.55 in dividends after 45 weeks
On Apr 14, 2021 the closing price was $105.40 meaning he had cost himself $19,475.82 plus $641.82 in dividends after 55 weeks

This brings the total position gain of "Market timing attempt #2" to be a loss of $20,117.65

This is a potential total endeavor loss (sum of attempts #1 &#2) of $18,702.57
« Last Edit: April 16, 2021, 09:54:36 AM by v8rx7guy »

Dibbels81

  • Stubble
  • **
  • Posts: 114
  • Location: Highland Park, IL
Re: Welp, I'm going to take a stab at timing the market
« Reply #758 on: August 07, 2021, 07:40:18 AM »
Hey v8rx7guy, how about a 2 1/2 year update?

secondcor521

  • Magnum Stache
  • ******
  • Posts: 4041
  • Age: 52
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Welp, I'm going to take a stab at timing the market
« Reply #759 on: August 07, 2021, 08:27:02 AM »
VTSAX closed at 111.37 on Friday, so as a rough additional amount it's

(469.41 * (111.37 - 105.40)) = $2,802.38

probably plus another half a percent or so in dividends, so just the #2 part would likely be over $23K.

Dibbels81

  • Stubble
  • **
  • Posts: 114
  • Location: Highland Park, IL
Re: Welp, I'm going to take a stab at timing the market
« Reply #760 on: August 07, 2021, 09:42:00 AM »
VTSAX closed at 111.37 on Friday, so as a rough additional amount it's

(469.41 * (111.37 - 105.40)) = $2,802.38

probably plus another half a percent or so in dividends, so just the #2 part would likely be over $23K.

Come on, now this is v8rx7g's baby. Doing the math yourself is like taking the carving knife away from Grandpa. Sure, we're all capable of slicing the turkey ourselves, but the satisfaction it brings Grandpa is worth waiting the extra few minutes. 

v8rx7guy

  • Handlebar Stache
  • *****
  • Posts: 2331
  • Age: 36
  • Location: Bellingham, WA
Re: Welp, I'm going to take a stab at timing the market
« Reply #761 on: August 07, 2021, 11:00:53 AM »
junioroldtimer sold 892.949 shares on Feb 7, 2019 at $67.59 each converting $60,354.43 into cash

junioroldtimer purchased 907.167 shares on Mar 13, 2020 at $66.14 each for gain in position of $1,294.78

However, he missed out on dividends totaling $1,282.58 during this time, for a market timing gain of $12.20 .  he had the initial $60,354.43 invested in an Ally savings account for that same ~1 year at a rate of 2.3% compounded monthly for a gain of $1,402.88 .

This brings the total position gain of "Market timing attempt #1" to be a gain of $1,415.08

Next, junioroldtimer sold 469.41 shares on Mar 27, 2020 at $63.91 each converting $30,000 into cash.

On Jun 5, 2020 the closing price was $78.85, meaning he had cost himself $7,012.99 after 10 weeks.
On Sep 1, 2020 the closing price was $87.08 meaning he had cost himself $10,876.23 plus $159.08 in dividends after 23 weeks
On Nov 19, 2020 the closing price was $89.66 meaning he had cost himself $12,087.31 plus $312.06 in dividends after 34 weeks
On Feb 5, 2021 the closing price was $99.32 meaning he had cost himself $16,621.81 plus $489.55 in dividends after 45 weeks
On Apr 14, 2021 the closing price was $105.40 meaning he had cost himself $19,475.82 plus $641.82 in dividends after 55 weeks
On August 6, 2021 the closing price was $111.39 meaning he had cost himself $22,287.59 plus $794.85 in dividends after 70 weeks

This brings the total position gain of "Market timing attempt #2" to be a loss of $23,082.44

This is a potential total endeavor loss (sum of attempts #1 &#2) of $21,667.36

secondcor521

  • Magnum Stache
  • ******
  • Posts: 4041
  • Age: 52
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Welp, I'm going to take a stab at timing the market
« Reply #762 on: August 07, 2021, 11:12:47 AM »
junioroldtimer sold 892.949 shares on Feb 7, 2019 at $67.59 each converting $60,354.43 into cash

junioroldtimer purchased 907.167 shares on Mar 13, 2020 at $66.14 each for gain in position of $1,294.78

However, he missed out on dividends totaling $1,282.58 during this time, for a market timing gain of $12.20 .  he had the initial $60,354.43 invested in an Ally savings account for that same ~1 year at a rate of 2.3% compounded monthly for a gain of $1,402.88 .

This brings the total position gain of "Market timing attempt #1" to be a gain of $1,415.08

Next, junioroldtimer sold 469.41 shares on Mar 27, 2020 at $63.91 each converting $30,000 into cash.

On Jun 5, 2020 the closing price was $78.85, meaning he had cost himself $7,012.99 after 10 weeks.
On Sep 1, 2020 the closing price was $87.08 meaning he had cost himself $10,876.23 plus $159.08 in dividends after 23 weeks
On Nov 19, 2020 the closing price was $89.66 meaning he had cost himself $12,087.31 plus $312.06 in dividends after 34 weeks
On Feb 5, 2021 the closing price was $99.32 meaning he had cost himself $16,621.81 plus $489.55 in dividends after 45 weeks
On Apr 14, 2021 the closing price was $105.40 meaning he had cost himself $19,475.82 plus $641.82 in dividends after 55 weeks
On August 6, 2021 the closing price was $111.39 meaning he had cost himself $22,287.59 plus $794.85 in dividends after 70 weeks

This brings the total position gain of "Market timing attempt #2" to be a loss of $23,082.44

This is a potential total endeavor loss (sum of attempts #1 &#2) of $21,667.36

Sounds about right.

;-)

theoverlook

  • Bristles
  • ***
  • Posts: 439
Re: Welp, I'm going to take a stab at timing the market
« Reply #763 on: August 10, 2021, 09:40:07 AM »
Meanwhile I did nothing and changed nothing about my strategy between February 2019 and August 2021 and my liquid net worth went up by 95% over that period.

HamsterStache

  • Stubble
  • **
  • Posts: 102
Re: Welp, I'm going to take a stab at timing the market
« Reply #764 on: September 26, 2021, 08:36:55 AM »
Meanwhile I did nothing and changed nothing about my strategy between February 2019 and August 2021 and my liquid net worth went up by 95% over that period.

Between the market and no daycare costs, plus stimulus, the pandemic has been extremely kind to our net worth. I realize we have been extremely fortunate in that respect as we both continued working for most of the time and unemployment covered about 100% of lost income.