The real "Herd"

I’ve seen some posts about the “herd” buying guns, ammo, provisions etc. while others are out there making killer profitable deals. I don’t think the prior is in the “herd”.
The real “herd” is doing neither making deals or storing canned goods. They go to work everyday while struggling to pay bills. They dollar cost average into their 401K’s mutual funds because that’s what they are supposed to do. The herd is getting creamed!!!
I’m a newbie investor who would be getting creamed with them if I followed the popular personal finance line of “dollar cost averaging”. I’m doing well with a short sale 4 unit I purchased in December of 2008. And, I’m doing well in the stock market because of ETF’s like EUO, EPV and RSW. I just want to thank everyone on this board for their contributions. Thanks!!


good thoughts JP…

here’s a little late-in-the-day perspective from Tyler over at Zerohedge…a good blog to add to your trading tools:


With all due respect I feel that dollar cost averaging is the best way for a novice investor to get into the market…My wife’s 401k has been totally dollar cost averaged and she is in the green on a 10 year return by a good amount…I guess it helps that I often shift her money around but all the same I feel this method works best over time…It enforces a saving mentality for the average person and it gets you into equities at a variety of price levels with relatively small chunks of money at once…So your never in pain per say because you are taking a long time horizon trade and I truly feel if you have a long term outlook and dollar cost average you will be a winner in the market…Give the average person $1 million to put to work at once in the market or $100,000 and they put it in at once I can guarantee they will be a loser before a winner…

Give the average person $1 million to put to work at once in the market or $100,000 and they put it in at once I can guarantee they will be a loser before a winner...

couldn’t agree more…

inch by's a cinch, yard by's hard


The correction, soon to be crash, is here: the market had a bigger relative open to close move today than it did on May 6. We closed at the day's lows on massive volume, despite definitive central bank intervention, regardless whether it was the SNB, the ECB, or the Fed. The central planners have lost control of the market,

I disagree. I don’t think a “crash” (and certainly not a collapse) is imminent. The Fed still has a lot of DESPERATE moves to make before we’ll have the REAL CRASH (COLLAPSE). However, at least it’s getting a little more interesting. Not too late to buy some food, ammo, and other supplies BUT AFTER THE COLLAPSE IT WILL BE TOO LATE.

I agree 100% with Jfpen that the “herd” is not buying guns, ammo, or provisions. In fact, only the EXTREME minority is doing this. What fun would it be during the collapse if everyone was prepared?

I think being an expert trader/investor gives you little bit of an edge for allocating funds for investing . I have a great deal of respect for your opinion and have learned much by reading your posts. I agree with what you say. I should clarify my original post.
My post was largely a result of my analysis of what my return would have been if I had been dollar cost averaging into the target date retirement mutual fund that I was in (FFFEX). In 2008 I took a massive hit like most people. I became very curious about the economy, the housing market and equity markets. I started reading books from economists and finance professionals who correctly forecasted the economic turmoil. I read books by Thomas Sowell, Paul Krugman, Peter Schiff, Ron Paul, Thomas Woods, and Robert Kiyosaki. Of the books I read, one by Martin Weiss was particularly good. I later learned that he sells investment research and recommendations. I subscribed to his free newsletter and then purchased a subscription to one of his reports. I did some research of back issues and found he was recommending that his subscribers exit the stock market before it crashed. If I had known this in 2008 I wouldn’t have taken a 45% hit. After learning this, I sold my target dated fund and opened a brokerage account. However, I knew without expert advice I would most certainly trade myself into poverty. Therefore, I subscribed to one his premium advisory services. My goals were to not loose money like in 2008 and maintain growth through all markets, good and bad. Because of this, I was able to enjoy the growth of SPY and Ford (Ford on fdjake’s recommendation). A few months ago I went to all cash. When Greece hit the news I bought EUO (inverse Euro ETF) I held that for a few weeks and made a 10% profit. Last Wednesday I bought EPV (Inverse European Stock Market ETF) and am up 18% on that trade as of today (sold half my EPV position today). I’m not making millions but I’m not loosing the money that I would be if I were dollar cost averaging into the fund I was in. With this latest stock market downturn the NAV for FFFEX is where it was in 1998.
There are many folks who don’t have a choice to make money in down markets. They have 401K’s that have horrible investment choices and don’t allow one to take advantage of inverse etf’s and other contra investments.
I’m a novice and I pay for advice from pros and am not embarrassed one bit. It is paying off. I feel like the deck is stacked against those doing what the mainstream financial folks have been recommending.


You are correct that I am quite the exception to the rule…Overall I still feel confident in the dollar cost averaging method for new investors…You also said in your last post that you sold before the market meltdown,but the etfs that track the indices bounced back close to prior levels…So while in hindsight you claim to have played it right you really just spun your wheels…My wifes 401k bounced back %65 just by owning etf’s that track the indices,Had I sold it during the slide I wouldve lost money…Rising tides lifted all boats…

Actually, I wrote that I lost money along with most people in 2008. Since moving into a self-managed brokerage account, I’m doing much better than my previous target date fund. I’m no genius investor and knowing that helps me. That’s why I pay for research and investment recommendations. In retrospect, I think that my gripe isn’t with dollar cost averaging as it is with the investment choices, or lack thereof, in most 401K’s.