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Rin has recognized that the Nasdaq is the Cap Gains arena


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2022 May 25, 2:49pm   1,292 views  6 comments

by Rin   ➕follow (8)   💰tip   ignore  

One of the reasons why the financial advisory world has been able to oversell the S&P500 to the public is that it's suppose to be representative of the general broad market.

What they don't realize is that high P/E ratios, limited dividends, and a focus on the tech laden companies like Amazon, Google, Tesla, Facebook, NVDIA, etc, makes it into a poor man's Nasdaq for the average 401K plan.

So if that's the case then why not just trade the Nasdaq and take advantage of all the tech buzz because we know that even when it explodes, it appears to resurrect itself again in a short time to repeat the cycle.

I've put together two charts for the years 2007 to 2010, possible the most brutal years for the markets since the 30s.

The first is a comparison between actively trading the QQQ, in which one buys when the price is higher than the 40 week (~200 days) exponential moving average at the start of the month and then sells it at the end of the month vs buying and holding.



The biggest difference is that the drawdown period with the traded account is lower than the buy n hold.



Then, my comparison is the high dividend low cap gain club of Altria, British American Tobacco, Rio Tinto, Carl Ichan Enterprises, and Annaly Capital



Where yes, the dividends help in that major dip ...



And so if you mix it up, 25% for the QQQ trading and 75% for buy n hold dividend portfolio, you get a pretty good result at the end of the bear market.

Comments 1 - 6 of 6        Search these comments

1   Rin   2022 May 25, 3:03pm  

The message is that even when that buy n hold portfolio was plunging, it was accumulating more shares than usual, making up for the cap gain losses.

In contrast, holding onto the QQQ or some other non-dividend yielding index, is just waiting for time to mend the damage.
2   KgK one   2022 Jun 2, 6:35am  

Ticker Voo ( snp 500) , has dividend
Good time to buy?
3   stfu   2022 Jun 2, 12:11pm  

Rin says
The message is that even when that buy n hold portfolio was plunging, it was accumulating more shares than usual, making up for the cap gain losses.


Can you run this analysis with SCHD and SPYD instead of your basket of individual dividend stocks?
4   Rin   2022 Jun 2, 3:29pm  

stfu says
Can you run this analysis with SCHD and SPYD instead of your basket of individual dividend stocks?


Neither of those ETFs go back before the 2008 crash.

So while it's valid to hold onto the S&P 500 dividend payers, the problem is that the recent waves of QE have gotten the entire S&P500 to go up, making even good companies like P&G too expensive.
5   Rin   2022 Jun 2, 3:49pm  

KgK one says
Ticker Voo ( snp 500) , has dividend
Good time to buy?


Here's a chart of VOO with the 40 week/200 day EMA & the MCAD histogram only using the default settings.



Throughout the bullish cycle, whenever the market was above the 200 EMA, the MCAD histogram would simply be a momentum indicator of the price action slowing down or gaining pace.

But then, post-2022, whenever the slope of the histogram slants upward, it's basically a re-test of the 200 EMA and not a turnaround of the market itself, from bear to bull. So the key here is for the market to close above the 200 EMA and then, if the MCAD histogram either stays flat or starts to slant upwards, then a reversal may be in effect. Otherwise, it's highly likely that it's just a bear market rally.
6   FortwayeAsFuckJoeBiden   2022 Jun 2, 6:28pm  

Rin says

KgK one says
Ticker Voo ( snp 500) , has dividend
Good time to buy?


Here's a chart of VOO with the 40 week/200 day EMA & the MCAD histogram only using the default settings.



Throughout the bullish cycle, whenever the market was above the 200 EMA, the MCAD histogram would simply be a momentum indicator of the price action slowing down or gaining pace.

But then, post-2022, whenever the slope of the histogram slants upward, it's basically a re-test of the 200 EMA and not a turnaround of the market itself, from bear to bull. So the key here is for the market to close above the 200 EMA and then, if the MCAD histogram either stays flat or starts to slant upwards, then a reversal may be in effect. Otherwise, it's highly likely that it's just a bear market rally.


so you don’t think itll be good market till 23?

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