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3rd Q, 4th Q selling scare
#1
I read an article about 3rd and 4th quarter increase and then rapid drop(price of stock). of course if you the stock value increases while you get your divs sounds like a win win.

I guess what im getting at is, is it better to buy early in the year as opposed to late in the year?

Does it even make a difference?

Thanks
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#2
You'll read these kinds of stories all the time. You have the December portfolio cleanup month for YE financials by the big financial companies. "Sell in May and go away" -- referring to the summer doldrums because all the big shot traders are in the Hamptons for the summer. Us older gents sometimes use the October 87 crash as a touchpoint for October being the worst month although that's only because we lived through it. Parenthetically, I think the Great Depression started with the market crash in early October also. Statistically speaking, September is supposed to the worst month for returns going back decades. This was from an article on Marketwatch on 9/2/2014:

"But if you go back even further to 1945, it’s even more apparent where September gets it’s bad reputation. Sam Stovall, U.S. equity strategist at S&P Capital IQ, notes the S&P 500 has ended September higher only 45% of the time, the worst showing of any other month, declining an average 0.55%."

Personally, I'd just focus on buying quality companies when the price meets your criteria. You never know when Mr. Market is going to have a fit.
=====

“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#3
(09-17-2014, 12:12 AM)Dividend Watcher Wrote: Personally, I'd just focus on buying quality companies when the price meets your criteria. You never know when Mr. Market is going to have a fit.

Agree totally! It's also the hard part when the market is rising, because you never get to a buy point. That's where patience comes in. The market will correct, eventually, and if you have solid positions than you will gain in the long term by having patience.

If your just beginning to invest than then you may wish to buy on a regular basis (if you can wait for minor drops) and benefit from Dollar Cost Averaging.

Don't get excited or worry that you missed an opportunity, there will be others and don't buy because of what you read or hear.
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#4
Further reading:

http://seekingalpha.com/article/2100633-...hes-part-1

http://seekingalpha.com/article/2268513-...why-part-1

http://seekingalpha.com/article/2277813-...ash-part-2

http://seekingalpha.com/article/2306285-...rprise-you

http://seekingalpha.com/article/2368265-...ual-stocks

Whenever some Guru-Wanabe is thumping scare tactics I go to BigCharts.com and look at the Dow from as far back as the chart goes. Yes there was the Great Recession and Depression but the overall direction is up, up, up.

And if you are retired or getting close and are a DG investor, while those will lose value during a correction, they will still keep paying if you have bought wisely.

Cheers
There are people who use up their entire lives making money so they can enjoy the lives they have entirely used up
Frederick Buechner
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#5
If regular price swings were known in advance, they would be traded out. I'm not a believer in Efficient Markets Hypothesis, but this is a choice illustration of how EMH works.
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#6
Interesting articles R&C2, i will have to read the rest of them. so i guess what im concerned about is price corrections and overvaluations. @EarthToDan - are you saying that you trade stocks out for others if you can foresee the corrections and flux in price?
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#7
(09-22-2014, 12:16 AM)TopRamenTrader Wrote: @EarthToDan - are you saying that you trade stocks out for others if you can foresee the corrections and flux in price?

No, what I'm saying is that publicly available information about the future gets built into the price now. If the future direction of the market could be known, the market would go there immediately, at which point, by definition, the future would hold only unknowns.

For example, you might have heard of "sell in May and go away." That wouldn't have worked this year, and in fact May was the start of another leg up in the S&P 500. This is because once everyone knows (or in this case expects) something, there is no informational advantage anymore.

Bottom line, the direction of the market is unknown.
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#8
http://seekingalpha.com/article/2531075-...-from-here
There are people who use up their entire lives making money so they can enjoy the lives they have entirely used up
Frederick Buechner
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#9
My experience has been that September and October are usually weak market months. Usually but not always. I keep dry powder so that if the weakness does materialize, I can take advantage of it.

This month has been a doozy of a weak October. There are several telling indicators, in addition to what is in front of your face, the market averages. In no particular order:

The VIX (volatility index) measures market fear. It got over 20 yesterday, which is a meaningful reading, exceeded in the last 3 years only by the major panic of Aug-Sep 2011. http://bigcharts.marketwatch.com/advchar...e&state=11

The Fear and Greed index. It closed at 1 yesterday, on a range of 0 (extreme fear) to 100 (extreme greed), which is as fearful as you can get. http://money.cnn.com/data/fear-and-greed/
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