Putting in sell stops below your stock ETFs

Discussion of the Stock portion of the Permanent Portfolio

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Matthew19
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Re: Putting in sell stops below your stock ETFs

Post by Matthew19 » Tue Aug 04, 2015 10:36 pm

Sounds like speculation to me. Do this in the VP. When your 20% stop hits, short the index as a full or partial hedge inside the VP and cover when your ready.
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Re: Putting in sell stops below your stock ETFs

Post by blackomen » Mon Aug 24, 2015 9:01 pm

For your variable portfolio, stop losses make sense.

For the permanent portfolio assets, stop losses basically defeat the purpose.
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ochotona
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Re: Putting in sell stops below your stock ETFs

Post by ochotona » Thu Aug 27, 2015 6:36 pm

My stops went off on Black Monday... it was not pretty. I got a lower price than I wanted, but I've been in since 2009 and have had such a huge gain, so... I'm not overly concerned. It was a big win; I turned all of those gains into cash. I'm down from 60% to a 30% stock allocation now, the Desert allocation.

Still not ready to buy gold. Not cheap enough. I think it could take the ill winds of deflation a while to whirl through the world economy. Gold could water-board it's owners at -10% for the next several years. C'mon $500.

Desert taught me to not worry about a 10-year Treasury bullet or cash-long Term barbell. I like a ladder, personally. It works out about the same.

One of these years, I'll be in the PP. Maybe as I slide into retirement. In the next 5-10 years.
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Re: Putting in sell stops below your stock ETFs

Post by dualstow » Thu Aug 27, 2015 9:35 pm

ochotona wrote: My stops went off on Black Monday... it was not pretty.
Sorry to hear that.
New drinking game: have a drink every time someone on the radio or TV news says "data"
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ochotona
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Re: Putting in sell stops below your stock ETFs

Post by ochotona » Thu Aug 27, 2015 10:00 pm

dualstow wrote:
ochotona wrote: My stops went off on Black Monday... it was not pretty.
Sorry to hear that.
No really, it was OK in the grand scheme of things. It's not good to get overly greedy.

Now it will be emotionally ugly if stock quickly pop back above the 200 day MA and I have to wonder about buying in again.
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dualstow
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Re: Putting in sell stops below your stock ETFs

Post by dualstow » Fri Aug 28, 2015 2:59 pm

ochotona wrote: Now it will be emotionally ugly if stock quickly pop back above the 200 day MA and I have to wonder about buying in again.
Precisely why I shy away from stop losses.
One of the many things on which Bogleheads and pp'ers agree upon is that allocation is key. Of course, the temptation to time is always there.
New drinking game: have a drink every time someone on the radio or TV news says "data"
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Re: Putting in sell stops below your stock ETFs

Post by mathjak107 » Mon Sep 14, 2015 6:40 am

My buddy had stop losses in place when the mini crash hit. They got executed not at his levels he set but the next price at the open when executed.

He got sold out down 900 points lower . He could be the poster child on why stop losses can hurt you very badley.

He said had he not used stop losses he would be 50k higher just leaving things alone.

Now he is hoping stocks tank thursday after the fed meeting so he can get back in and not be so far behind.
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ochotona
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Re: Putting in sell stops below your stock ETFs

Post by ochotona » Mon Sep 14, 2015 1:04 pm

I did manage to sell more of my stock this week, so my average sales price over the last few weeks is fine. But yes, life lessons. "sell stop LIMIT", not just "sell stop" !!!
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Re: Putting in sell stops below your stock ETFs

Post by mathjak107 » Fri Sep 25, 2015 7:43 pm

They both have their place. A stop limit does not protect you as much.

You could have a stock set with a limit of 15 dollars and in a fast market hit 14.50 and then fall to 12 and never sell you out. The stop loss at 15 becomes a market order once 15 or less is hit.
You would have gotten out at 14.50 in the above scenario .the stop limit would never have triggered and you had no protection in the end.

The flash crash was the exception where a stop limit and not stop loss would have been better but only because we came right back up.
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ochotona
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Re: Putting in sell stops below your stock ETFs

Post by ochotona » Sat Sep 26, 2015 11:12 am

Math, when I'm a retired dude like you I'll be able to put eyeballs on the screen and place the trade I really want! I actually caught what could have been the dead cat bounce, so over both trades I did OK, especially since I have been in the market since forever. I am using trendfollowing now, ten month moving average. Look at it once a month.

Trendfollowing applied to the PP works out great, over time. Trendfollowing has you 100% in cash now. But when I get back in, it will be Mebane Faber's 10 ETF Ivy portfolio (which I have stretched to 14 with some extra bond categories). Maybe when I'm a retired dude I will be in the PP, with a vault somewhere full of gold bought at $500 $250 per ounce.
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Re: Putting in sell stops below your stock ETFs

Post by MachineGhost » Tue Sep 29, 2015 4:33 pm

Gold is a useless barbarous relic; it isn't money anymore and never will be again.

Stop losses are great; online stop losses at the broker where the market maker can see them is not.
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