Depending on their strategy, I guess different people keep different percentages of their account value in cash (“free funds”).
Probably long-term investors just invest it all in value stocks each month and don’t try to trade/time the market.
I see myself as a long-term investor, but I still keep about 5% of my account value in cash. Half of that is “blocked for pending orders”, waiting for a good opportunity for value stocks. So many good businesses I would love to own look so overvalued now. A few times over the last months, I’ve used this cash to successfully “buy the dip”. But in the end, it could prove better just to buy the stocks you believe in - the sooner the better.
Difficult question. I only keep beer money cash in 212 or other brokers, actual cash is held in banks.
I guess if you have target entry points to trade, do you also monitor if the fundamentals they are based on have shifted, hence the drop in price to meet your set execution level?
Not every time. For example last week some Coca Cola pending orders got executed because of the small price drop (thanks Ronaldo).
In the general case a price alarm is triggered when a stock drops to an attractive price, and I check the news. Some of these stocks I buy regularly, but when they dip I buy greater amounts, using the free funds.
At the start of the month I will cost average into my pie(s). And then at the end of the month after expenses and any other spending if I have some cash left over that’ll go in waiting for a good time to buy into something on a dip or correction.
Like Donald above I mostly unsuccessfully try to keep 5-10% in cash.
I have around 5% uninvested cash to “play” in day/swing trades (including when the markets are too much volatile, e.g. VIX, and when markets are in selloff mode).
Sometimes my account stays near 0% of uninvested cash for some time.
@RLX Almost the same here Rick, I do occasionally place some orders just for the fun, with very little sums of money. For example when I get volatility notifications from T212 or on some IPO days. But it’s playing, not real trading.
I guess @Abdullah is the real trader here 25-50% is a lot!
My volatility trades at the moment is trading with a VIX ETF, because I have less time to do day trading. In the past, I surfed the daily volatility of stocks.
When there are selloffs/corrections in the markets, I use short leveraged ETFs.
And when some stocks have a down trend, I use short leveraged ETPs.
I do Macroeconomic Analysis by following the daily news (macroeconomic data releases), especially central banks’ monetary policies, a bit less on fiscal policies (less relevant for me, due to political uncertainty and propaganda)
Then I start seeing Asia-Pacific stock exchanges in their first hours of trading and VIX/S&P 500/Nasdaq futures evolution before US markets open, add some Technical Analysis (TA) to confirm or not my investment decisions.
The short ETFs I use are leveraged that reset daily, so the TA (and ETFs prices) are less relevant, I do the TA in the underlying index (S&P 500, Nasdaq).
But sometimes, all that is thrown away, by some random event, that brings the markets down and volatility up.
Also complement the decisions by following other “indicators”, like the Gold, USD/JPY, EUR/USD, UST 10Y, Oil.
I usually keep in block of ÂŁ100-200 only and i sue this to buy any dips on my shares
I have a portfolio of 60 shares and keep topping up on dips and i received dividends on this shares too
When my cash is down I just transfer in free from my bank account takes couple second only to transfer
Have a fab week all
25-50% is a lot!
