Old_Skeet's market barometer closed the week with a reading of 142, up one point from the previous week, and remains with an overvalued reading for the S&P 500 Index. The four week rolling average also computes to 142. A reading of 142 on the barometer amounts to the Index being overvalued by about five percent. At the beginning of the year the barometer had a reading of 147 indicating the Index was, at the time, overvalued by about 1%. In checking Mornigstars Market Valuation Graph it reflects stocks that it follows are in the three to four percent ovevalued range. I have provided a link for its viewing below.
http://www.morningstar.com/market-valuation/market-fair-value-graph.aspxDuring the month of March I trimmed my equity allocation by about three percent and have begun to restore my CD ladder along with expanding the number of funds held in my income sleeve from six to nine and in my hybrid income sleeve also from six to nine. This brings the total funds in the income area up to 18 from the previsouly held 12.
Looking into April I plan to continue to fund my income area of the portfolio while I continue the process to reduce equities because of their over valuation. I am currently weighted at about 50% equity and my equity weighting matrix is currently calling for a weighting of 47% based upon the rolling four week average of the barometer. The overweight is because of a seasonal investment strategy where I tend to overweight equities during the early fall, through the winter and on into early spring where I then begin a process to rebalance and reduce equities towards their lower range within my portfolio through the summer. The barometer and equity weighting matrix indicator plays a big role in the rebalance process of my equity allocation. In addition, I usually hold less equities in periods of their over valuation and more equities in periods of their under valuation. A lower reading on the barometer indicates there is less investment value in the 500 Index while a higher reading of the barometer indicates more value.
And, so it goes ... another week is now in the books.
Thanks for stopping by and reading.
