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Investors Brace for Stocks to Fall Again Ahead of Earnings
In addition, you might find the below link of interest about the earnings outlook for the S&P 500 Index. It seems earnings came in at $93.90 for the past trailing twelve months (September ending) and are now down from $102.31 (or 8.2%) from the start of the year. Seems the Index's price action has followed earnings down as both it's earnings and price are both off about the 8% (range) from their 52 week highs.
i sold quite a bit of stuff on thursday but the strength and reversal-nature of friday's rally has been thinking i messed up once again. how 'about you?
I thinking I did the right thing in selling some of my equities off and raising my cash allocation in this recent downdraft which has lead to a correcting in some assets. If equites restart and make an upward fall run then I plan to sell some of my equities off in steps keeping my allocation to equities at about 50%. Should they continue to pull back I'll do some buying around the edges striving to keep my equity allocation (again) somewhere around 50%. However, I think I'll wait until Ron Rowland greenlights another asset class beside cash being the number one buy position in his Leadership strategy before I begin to buy; and, I'd like to see the Mosse also greenlight a new buy position and move off of "Hold Cash."
Anyway, this is my current thinking ... subject to change, "of course."
Old_Skeet....let's see what the earnings look like over the next few weeks. I wouldn't be too surprised if a few stocks report a miss, and then lower forward estimates. Of course they will get obliterated, and then make it back later when they beat the lowered forecasts.
Also, I hope Boehner gets a deal to raise the debt ceiling before he leaves so the new speaker doesn't need to deal with it in December. If not, I expect Congress to create a general mess before Christmas.
Unfortunately, there are a lot of things that can go wrong over the next few weeks.
O_S: That at least sounds like a rational plan. Personally, I don't think the Moose or Roland have that great a market-timing (or rotation-strategy) track record but moving out of cash should mean something, right? the way this market is rocketing around, one day I think I did the absolute right thing, the next, the absolute wrong thing. or, as on Friday, both within the same hour. Crazy.
I guess, what I should have written is that I'd like to see a couple of the other timers (I track) confirm my own greenlight. I do think that we will see a fall rally of sorts but not to all time new highs. And, as we move into 2016 I am thinking, perhaps not in the first quarter but somewhere around spring stocks will go soft again. Perhaps, we might make it to summer before the softness settles in (not sure). I thinking the fourth quarter of 2015 will be better than its third quarter. And, with a good fourth quarter that should lift stocks during the first part of the new year. If the fed and Congress would get their act together and not screw the markets then things would be better all around. No doubt there are a lot of possibilities and most anything can happen.
Anyway, I have decided to run my portfolio towards a conserative tilt (in some areas) rather than a neutral to aggressive one. However, I do plan to stay within my asset allocation ranges. That would be cash with a low range of 5% to a high range of 25% with a neutral position being 15%. For bonds my range would be a low of 20% to a high of 40% with the neutral position falling around 30%. In the growth and income area my allocation range would be a low of 25% to a high range of 45% with the neutral position at 35% and for my growth area I am looking at a low range of 10% to a high of 30% with the neutral position being 20%. If I have stated this correctly then the neutral positions should add up to 100%, and they do. According to Xray, I am heavy in cash at 25%, light in the income area at 20%, a little light in the two equity areas and when combined score at 50% and add other assets (as defined by Morningstar) at 5% and all this should add up to 100%. And, it does.
I'd rather miss some of the potential upside to be better persevered to downside market movement in both stocks and bonds.
I state what I am doing because, in the past, there have been some posters on the board that have called me out when I post my postions, my thinking, and my results after the fact. Now, I post my positioning and thinking in advance along with stating my reasoning and perhaps providing a few reference sources to posture my thinking. And, just because Old_Skeet positions as he does, does not mean it is (or might be) right for you. Do your own reasearch and due dilegence and govern from you own findings ... not someone else's.
O.S.: so ... what would make you reconsider your new posture? My fear is that we rally toward new highs and I get suckered in toward the last minute, worrying that i'm missing out. Would it take fresh and convincing new highs to change your mind or something else? i hate it when i put myself in this position, which i have done often enough before, never to my benefit. when will i learn? i dunno. but maybe this time it will work out. we shall see!
Judging by many of the posts on MFO, investors seem to be going in and out of the market when it seems to top and when its on a temporary downward spiral. I will be the first to admit I trade my stocks (10%) of portfolio taking profits or limiting losses, but I don't trade out of my etfs and funds (56% ) very often unless I leave a fund due to long term underperformance or sector weighting out of wack over more than 6 months. Not that I often don't want to it is very tempting to run when the market is tanking, but thats why I have a FA so I don't make stupid moves LOL. I have an allocation by cap size, style, sector and equity/bond that I can live with so I tend to stick with it.
Are there others pretty much sticking to their allocation without buying/selling down to "protect" themselves? I also do not own any long/short or leverages etfs, I just stick to the basics. I also do not have much in bond funds, mostly individual bonds which don't tend to go up and down a lot. Thanks in advance for any responses.
Judging by many of the posts on MFO, investors seem to be going in and out of the market when it seems to top and when its on a temporary downward spiral. I will be the first to admit I trade my stocks (10%) of portfolio taking profits or limiting losses, but I don't trade out of my etfs and funds (56% ) very often unless I leave a fund due to long term underperformance or sector weighting out of wack over more than 6 months. Not that I often don't want to it is very tempting to run when the market is tanking, but thats why I have a FA so I don't make stupid moves LOL. I have an allocation by cap size, style, sector and equity/bond that I can live with so I tend to stick with it. ..... Are there others pretty much sticking to their allocation without buying/selling down to "protect" themselves? I also do not own any long/short or leverages etfs, I just stick to the basics. I also do not have much in bond funds, mostly individual bonds which don't tend to go up and down a lot. Thanks in advance for any responses.
@ Slick - Not sure I agree with your characterization of how others invest. They can address that individually if they want. However, you did incite me to go back and re-read David's October Commentary. Here's one of my favorite take-aways:
Referring to money manager Andrew Foster, David writes, "The solution he propounds is the same one you should adopt: Build an all-weather portfolio that manages to be 'strong and happy' in good markets and 'reasonably resilient' in bad ones."
To that goal I have striven to be true. (And it ain't easy.) So like you Slick, I allocate broadly and try to keep "hands off" as much as possible. And there are many, many others here who I believe employ a similar approach.
Slick, it can seem like many here are in and out when you read posts like 'what are you buying/selling'. I think though, like you (and me) most are working on the fringe. I also have set allocations through Schwab that are basically buy and hold but I do have a little play money in my IRA to dabble with on stocks and ETF's. I have to admit it's really a hobby that I'm learning as I go along... (biggest learnings, the 1% rule and setup your sell-stop as soon as you make your buy, live and learn )
Comments
I thinking I did the right thing in selling some of my equities off and raising my cash allocation in this recent downdraft which has lead to a correcting in some assets. If equites restart and make an upward fall run then I plan to sell some of my equities off in steps keeping my allocation to equities at about 50%. Should they continue to pull back I'll do some buying around the edges striving to keep my equity allocation (again) somewhere around 50%. However, I think I'll wait until Ron Rowland greenlights another asset class beside cash being the number one buy position in his Leadership strategy before I begin to buy; and, I'd like to see the Mosse also greenlight a new buy position and move off of "Hold Cash."
Anyway, this is my current thinking ... subject to change, "of course."
Also, I hope Boehner gets a deal to raise the debt ceiling before he leaves so the new speaker doesn't need to deal with it in December. If not, I expect Congress to create a general mess before Christmas.
Unfortunately, there are a lot of things that can go wrong over the next few weeks.
press
the way this market is rocketing around, one day I think I did the absolute right thing, the next, the absolute wrong thing. or, as on Friday, both within the same hour. Crazy.
I guess, what I should have written is that I'd like to see a couple of the other timers (I track) confirm my own greenlight. I do think that we will see a fall rally of sorts but not to all time new highs. And, as we move into 2016 I am thinking, perhaps not in the first quarter but somewhere around spring stocks will go soft again. Perhaps, we might make it to summer before the softness settles in (not sure). I thinking the fourth quarter of 2015 will be better than its third quarter. And, with a good fourth quarter that should lift stocks during the first part of the new year. If the fed and Congress would get their act together and not screw the markets then things would be better all around. No doubt there are a lot of possibilities and most anything can happen.
Anyway, I have decided to run my portfolio towards a conserative tilt (in some areas) rather than a neutral to aggressive one. However, I do plan to stay within my asset allocation ranges. That would be cash with a low range of 5% to a high range of 25% with a neutral position being 15%. For bonds my range would be a low of 20% to a high of 40% with the neutral position falling around 30%. In the growth and income area my allocation range would be a low of 25% to a high range of 45% with the neutral position at 35% and for my growth area I am looking at a low range of 10% to a high of 30% with the neutral position being 20%. If I have stated this correctly then the neutral positions should add up to 100%, and they do. According to Xray, I am heavy in cash at 25%, light in the income area at 20%, a little light in the two equity areas and when combined score at 50% and add other assets (as defined by Morningstar) at 5% and all this should add up to 100%. And, it does.
I'd rather miss some of the potential upside to be better persevered to downside market movement in both stocks and bonds.
I state what I am doing because, in the past, there have been some posters on the board that have called me out when I post my postions, my thinking, and my results after the fact. Now, I post my positioning and thinking in advance along with stating my reasoning and perhaps providing a few reference sources to posture my thinking. And, just because Old_Skeet positions as he does, does not mean it is (or might be) right for you. Do your own reasearch and due dilegence and govern from you own findings ... not someone else's.
I wish all ... "good investing."
Old_Skeet
i hate it when i put myself in this position, which i have done often enough before, never to my benefit. when will i learn? i dunno. but maybe this time it will work out. we shall see!
Are there others pretty much sticking to their allocation without buying/selling down to "protect" themselves? I also do not own any long/short or leverages etfs, I just stick to the basics. I also do not have much in bond funds, mostly individual bonds which don't tend to go up and down a lot. Thanks in advance for any responses.
Referring to money manager Andrew Foster, David writes, "The solution he propounds is the same one you should adopt: Build an all-weather portfolio that manages to be 'strong and happy' in good markets and 'reasonably resilient' in bad ones."
To that goal I have striven to be true. (And it ain't easy.) So like you Slick, I allocate broadly and try to keep "hands off" as much as possible. And there are many, many others here who I believe employ a similar approach.
Regards