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Does this count as "timing the market" or no?

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    Does this count as "timing the market" or no?

    I am aware of the advice to never time the market.

    Purpose of my question is to understand:
    Q: Does shorting my positive accounts, while continuing to invest at the same rate count as timing the market?

    Reason I ask:
    My taxable portfolio is doing quite well this year, and I investigating the idea of taking out ~100k of my taxable portfolio to fully pay off my rental property and personal mortgage (allowing for enough buffer to account for taxes gained).

    From doing this I will free up an $800 monthly mortgage payment worth of income, and also be able to start using the $550 from my investment property towards other savings/other ( 550 = my 1/2 of the rental income as I share the home w/ my brother).

    This will capture the 3.5% on 57K I owe for my home and 4.75% on 45K I owe on my 1/2 of the rental. So it will turn my immediate cash into saving that amount of interest.

    Then I will redirect all of this freed disposable income, into increasing my monthly taxable investments from 1k --> ~2.5k.

    Questions:
    1)Does this seem rational? Or does this go against the "don't time the market", because I am selling my funds while they are very high?

    2) Comments or opinions.
    Note* - I understand I will be missing the delta of interest because 7% SP avg is higher than 3.5% or 4.75%, but if there was a good time to get rid of some debt, now seems as good a time as ever. Especially if i will continue to capture market investing w/ the freed up income.

    #2
    Selling to realize gains and having an intended use for the money is not market timing (IMO).

    If you were selling just to have it sit in cash, then that might be considered market timing.

    If you sold because you are scared of the crash and want to be out of the market completely, that is market timing on the selling side (IMO)

    Comment


      #3
      Thank you for your input, I am confused w/ market timing.... what is considered prudent and what is not.

      I don't really need to sell current holdings... It just seems, given the current market, it would be a wise time to.

      I guess that counts as "timing". I think I just have had "don't time the market" drilled into my head so much, that selling during this high point seems to be some form of strategic timing.

      My original plan was just to just take out the $45k to pay off the rental property. Which I will do no matter what.

      Comment


        #4
        Seems like an ok plan if you are trying to eliminate debt and free up cash flow.
        I don't view your plan as market timing.

        Just to be contrarian, what is you took that same $100K and used it as down payments on 2 or 3 more rental units? That move would give you more debt, but it would also increase cash flow quite considerably more than $800 a month.
        Brian

        Comment


          #5
          Originally posted by bjl584 View Post
          Seems like an ok plan if you are trying to eliminate debt and free up cash flow.
          I don't view your plan as market timing.

          Just to be contrarian, what is you took that same $100K and used it as down payments on 2 or 3 more rental units? That move would give you more debt, but it would also increase cash flow quite considerably more than $800 a month.
          Thank you for the re-assurance, related to market timing qualification. It's hard to divorce everyone's Advice/opinion on strategy from pragmatic action towards my goals.

          I'm planning on buying another rental this March.

          So this was partially to take advantage of current gains, clear up debt, and make room for more credit to be used.

          I have a Heloc established, that has $52k credit line, so I'm going to use that w/ my investment partner to buy a ~$70k rental w/ target rental income of ~$1k/month . To test to waters for my first purchased rental (I inherited current one).

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