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FYI: In April of every year, we see dozens of articles urging us to sell in May and go away. In its basic form, you sell stocks on May 1, and you buy them back on Nov. 1. The strategy is credited to the respected Yale Hirsch of the Stock Trader’s Almanac, who began covering it in 1986. Regards, Ted http://www.etf.com/sections/features-and-news/should-you-sell-may-go-away?nopaging=1
An interesting article for the "Sell in May" crowd like myself that use the strategy as part of my investment plan and have for a good number of years. I have bookmarked it for future reference.
One of the primary reassons that I have been a big fan of the strategy is that one can use it during low interest rate periods (like we have been in) and make good money with part of your cash being placed into the strategy between the end of October throuh the end of April. Then move back to cash during the off period. Most times you will make more than just what interest alone would have paid. At least, it has for me through the years.
Some that use this strategy like to aveage in and out of their special investment positions as I do. And, yes sometimes I move to bonds and/or cash ... but, this year I decided to expand my hybrid income sleeve and open a few new positions as hybrid income funds usually hold bonds plus good dividend paying stocks along with some other asset classes. I felt my hybrid income sleeve could better weather the anticipated coming FMOC rate increases over my bond funds. So, this year I have started to venture into the hybrid income space along with starting the restoring of my CD ladder. I felt this was a good move since I already have ample cash that can be put to work should a sizeable stock market pullback develop.
My new target asset allocation (as defined by Xray) is cash 20%, income 30% (up 5%), stocks 45% (down 5%) and other assets 5%. Currently, I am stock heavy and income light by a few percent each ... but, come sometime in May I plan to be closer to my target allocation.
Please note, I use the "Sell in May" strategy as part of a well diversified investment plan and not as a complete investment strategy in and by itself. This is because, most times it works but sometimes it doesn't work; and, I have learned through my many years in investing there is no sure thing.
I have three hybrid sleeves and with this I just decided to post a description of my sleeve management system along with current holdings which includes area allocations as of April 1, 2017. This does not include the seasonal revision to my portfolio's new overall allocations noted in my above post but it will provide fund holdings that you seek. Come fall, I'll most likely be back to the overall allocations described below.
Old_Skeet's Sleeve Management System
Now being in retirement here is a brief description of my sleeve management system which I organized to better help manage the investments held within mine & my wife’s combined portfolios. Currently, the master portfolio is comprised of two taxable investment accounts, two self directed ira accounts, a health savings account plus two bank accounts. With this, I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty/theme sleeve plus a special investment (spiff) sleeve. Each sleeve (in most cases) consists of three to nine funds with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held the exception is the spiff sleeve. By using the sleeve system one can get a better picture of their overall investment landscape and weightings by sleeve and area. In addition, I have found it beneficial to Xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets along with using an adaptive allocation matrix as an aid to help set the stock allocation weighting. All funds pay their distributions to the cash area of the portfolio with the exception being those in my health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount (if necessary) with the residual being left for new investment opportunity. Generally, in any one year, I take no more than a sum equal to one half of my portfolio’s average five year return. In this way, principal builds over time. In addition, most buy/sell trades settle from, or to, the cash area with some net asset value exchanges between funds taking place.
Last revised: 04/01/2017 Master Portfolio
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral allocation weightings are cash 20%, income 30%, growth & income 35%, growth & other assets 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Currently, according to Morningstar Instant Xray, I am about 20% in the cash area, 25% in the income area, 35% domestic stocks area, 15% foreign stocks area & 5% in the other asset area. In addition, I have the portfolio set up in Morningstar’s Portfolio Manager by sleeve and as a whole for easy monitoring plus I use brokerage account statements along with some other Morningstar reports as well.
Cash Area (Weighting Range 15% to 25% with neutral weighting being 20%) Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual) Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 25% to 35% with neutral weighting being 30%) Fixed Income Sleeve: BAICX, CTFAX, FMTNX, GIFAX, LALDX, LBNDX, NEFZX, THIFX & TSIAX Hybrid Income Sleeve: APIUX, CAPAX, DIFAX, FISCX, FKINX, ISFAX, JNBAX, PGBAX & PMAIX
Growth & Income Area (Weighting Range 30% to 40% with neutral being 35%) Global Equity Sleeve: CWGIX, DEQAX & EADIX Global Hybrid Sleeve: CAIBX, TEQIX & TIBAX Domestic Equity Sleeve: ANCFX, FDSAX, INUTX & SVAAX Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FBLAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 20% with neutral weighting being 15%) Global Sleeve: ANWPX, SMCWX & THOAX Large/Mid Cap Sleeve: AGTHX, BWLAX & SPECX Small/Mid Cap Sleeve: PCVAX, PMDAX & TSVAX Specialty & Theme Sleeve: LPEFX, PGUAX & NEWFX Spiff Sleeve: VADAX
@: I believe the market will move sideways until late September, then it will add another 5%. The only thing wrong with selling in May and going away is at what point do you get back in ? Regards, Ted
Some folks use the calendar; however, I use a twist put on the calendar and that is my market barometer and equity weighting matrix to assist me in when to throttle up (or down) my equity allocation.
I have written about my system often and if one wants to read more on my system then they can reference my post titled "The Markets and More."
I have linked my most recent April 13th post on "The Markets and More" below. In addition, this link provides another link to my 2475 call for the S&P 500 Index. I'm thinking that this will take place sometime during 4Q2017.
A seasonality strategy I came across recently (sorry, no link) is to SELL when MACD goes negative (or other momentum stat threshold of your choice) on or after April 20, and BUY when MACD goes positive on or after October 16.
I've done something similar in the past, using simple moving averages, but can't claim any great success with it.
Thanks for making comment on tools that can be used for entering and exiting a seasonal strategy. Although, I don't use the MACD in my technical strength feed, in my barometer, I have chosen to use a combination of the relative strength and money flow indicatior instead. I'm thinking the MACD will probally work as well but the RSI and MFI offered more meaningful information, for me, over the MACD. I'm seeing it more of a trigger than a measuring tool.
@Old_Skeet, there are so many options for technicals, it makes the head swim. I pretty much limit myself to the default free chart on StockCharts/SharpChart, with RSI, simple MAs, and MACD, and all the time options. I've found the weekly chart works better for my purposes than daily.
Easier and maybe more profitable to just stay invested.
Kind of a to-each-his-own thing. Doesn't mean you're not still invested, maybe just not fully invested in equities, and a simple strategy can make quite a difference in a big drawdown.
Interestingly, the MACD recently went to negative bias for the S&P 500 Index. And, I guess I could start using it for my technical strength feed but my past data comes form the RSI & MFI. However, I am going to start recording MACD data to see how it goes and possibly how to scale it into the barometer.
AndyJ, I was interested in your use of technical indicators. I also am using weekly charts, with the following indicators/overlays: RSI, PPO (a variant of MACD), Bollinger Bands, and Chandelier Exits. I plot price using the Elder Impulse System.
Hi Tony, I'll have to check out the last two indicators you mentioned - not familiar with them. I've kept it pretty simple on my end, just trying to avoid larger than the "normal" drawdowns in my fairly conservative retirement portfolio and picking spots here and there for buys with a decent probability of gains. -- AJ
A seasonal issue that is often overlooked is simply that being actively invested requires attendance. You have to follow the antics of Captain Price. Feh. I'd rather spend more time in my garden and with my grandkids. l can raise some cash from my more active investments and put the rest on cruise control. I can wait until the fall to start picking my Santa Claus plays.
In autumn of 2007 we found ourselves in northern Europe as the markets crashed worldwide, and not a thing could we do. This year we will also be away in France for a month, and I'm not taking any chances with this screwball that we have inflicted upon ourselves. Today I reduced our funds down to about 5k in each one as a "holding" position, and I'll take a look at restoring the normal balances probably sometime in late June, if things seem to still be on a somewhat even keel (and also if we survive a week in Paris dodging ISIS).
I know. I'll RMD on May 1, buy a 6 month CD, then at the end of the 6 months, invest in a tax managed equity fund (or defense or healthcare depending on the weather).
I hope you have a most enjoyable trip. My wife and I plan a fall trip to Panama and we have given trading authority on our investment and retirement accounts to our son ... just in case account action might be warranted ... plus he is also our Power of Attorney so he can handle other matters should it become necessary. I'm not wanting to sell down our taxable accounts before we travel out of the States because come tax time I'd be paying tax on the capital gains just to re-enter the market a bit later plus a good bit of our invstment worth is held in these accounts. The retirement accounts are a little different as we don't pay taxes until we take withdrwals. So selling out and then going back in could be done without capital gain taxes along with I'm thinking you have a certain period of time you can reinvest the sell proceeds commission free. Check with your broker first before doing this.
All the tools discussed here are variations of market timing schemes. As the posts suggest, there are an endless number count of these techniques, some of which are highly sophisticated.
I don't participate in this investment ritual. For the most part, I make portfolio adjustments about twice a year and it's not in that May deadline timeframe.
Here is a Link that nicely summarizes why I am not a very active participant:
In its closing paragraph it accurately summarizes my feelings on this matter: "All of this is not to say that timing is impossible, but the odds appear in favor of the buy and hold investor rather than the market timer. "
I practice that conclusion because I'm not a learned, self-confident investor, and I'm not prepared to pay the time price to become one. I thank you active market players for your dedication and for keeping the marketplace fluid. There is plenty of room for alternate investment approaches and each may be successful ( or otherwise).
"I will look at any additional evidence to confirm the opinion to which I have already come." That's Lord Molaon, an Englishman, speaking. We seek conformation. We all are burdened with our own biases. I wish us all luck in overcoming them. We surely need that luck.
@Old_Joe , I'm jealous. Paris was the most beautiful city I've ever been to. I was lucky enough to go to Chalone-sur Saone France a couple times for work in the 90's, and on one of those trips my wife and I took some vacation time in Paris. I was heart broken to see pictures of Champs Elysées after the terrorism knowing we sat at an outside cafe drinking little, very strong cups of coffee and eating pastries with the same view of the Arc de Triomphe that was in the papers.
Enjoy, and I don't blame you for the pull back before you leave.
Something tells me if I didn't do so much schooling I would have time and space left in my brain and would have known what this is. Not just that, I would have invented younger impulse system - which I can understand. I read that link twice and am not really able to see from the examples how it will work. The example is not showing "good trades". Besides it is leaving the MACD parameters open "keeping it simple" and "based on what we have used". I need my ANALysis to be clearer.
So I'm going to call what I do the "Younger ANAL System". Copyright pending.
There are a lot of thoughts when it comes to investing and if one should as some say market time using some common known and often written about investment strategies. From my perspective, if they did not work folks would not write about some of the more commonly known and the more easily used strategies.
From my own experience, I've been successful with my special investment positions because my account through the years has often commented to me ... You owe taxes on your stock market profits. Sometimes he ask ... Did you have losses that could have been sold to offset some of these gains? And, my answer is usually ... No.
With this ... I plan to continue opening and closing special investment positions from time-to-time as I feel warranted.
Comments
One of the primary reassons that I have been a big fan of the strategy is that one can use it during low interest rate periods (like we have been in) and make good money with part of your cash being placed into the strategy between the end of October throuh the end of April. Then move back to cash during the off period. Most times you will make more than just what interest alone would have paid. At least, it has for me through the years.
Some that use this strategy like to aveage in and out of their special investment positions as I do. And, yes sometimes I move to bonds and/or cash ... but, this year I decided to expand my hybrid income sleeve and open a few new positions as hybrid income funds usually hold bonds plus good dividend paying stocks along with some other asset classes. I felt my hybrid income sleeve could better weather the anticipated coming FMOC rate increases over my bond funds. So, this year I have started to venture into the hybrid income space along with starting the restoring of my CD ladder. I felt this was a good move since I already have ample cash that can be put to work should a sizeable stock market pullback develop.
My new target asset allocation (as defined by Xray) is cash 20%, income 30% (up 5%), stocks 45% (down 5%) and other assets 5%. Currently, I am stock heavy and income light by a few percent each ... but, come sometime in May I plan to be closer to my target allocation.
Please note, I use the "Sell in May" strategy as part of a well diversified investment plan and not as a complete investment strategy in and by itself. This is because, most times it works but sometimes it doesn't work; and, I have learned through my many years in investing there is no sure thing.
I wish all ... "Good Investing."
Old_Skeet
I have three hybrid sleeves and with this I just decided to post a description of my sleeve management system along with current holdings which includes area allocations as of April 1, 2017. This does not include the seasonal revision to my portfolio's new overall allocations noted in my above post but it will provide fund holdings that you seek. Come fall, I'll most likely be back to the overall allocations described below.
Old_Skeet's Sleeve Management System
Now being in retirement here is a brief description of my sleeve management system which I organized to better help manage the investments held within mine & my wife’s combined portfolios. Currently, the master portfolio is comprised of two taxable investment accounts, two self directed ira accounts, a health savings account plus two bank accounts. With this, I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty/theme sleeve plus a special investment (spiff) sleeve. Each sleeve (in most cases) consists of three to nine funds with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held the exception is the spiff sleeve. By using the sleeve system one can get a better picture of their overall investment landscape and weightings by sleeve and area. In addition, I have found it beneficial to Xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets along with using an adaptive allocation matrix as an aid to help set the stock allocation weighting. All funds pay their distributions to the cash area of the portfolio with the exception being those in my health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount (if necessary) with the residual being left for new investment opportunity. Generally, in any one year, I take no more than a sum equal to one half of my portfolio’s average five year return. In this way, principal builds over time. In addition, most buy/sell trades settle from, or to, the cash area with some net asset value exchanges between funds taking place.
Last revised: 04/01/2017 Master Portfolio
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral allocation weightings are cash 20%, income 30%, growth & income 35%, growth & other assets 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Currently, according to Morningstar Instant Xray, I am about 20% in the cash area, 25% in the income area, 35% domestic stocks area, 15% foreign stocks area & 5% in the other asset area. In addition, I have the portfolio set up in Morningstar’s Portfolio Manager by sleeve and as a whole for easy monitoring plus I use brokerage account statements along with some other Morningstar reports as well.
Cash Area (Weighting Range 15% to 25% with neutral weighting being 20%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 25% to 35% with neutral weighting being 30%)
Fixed Income Sleeve: BAICX, CTFAX, FMTNX, GIFAX, LALDX, LBNDX, NEFZX, THIFX & TSIAX
Hybrid Income Sleeve: APIUX, CAPAX, DIFAX, FISCX, FKINX, ISFAX, JNBAX, PGBAX & PMAIX
Growth & Income Area (Weighting Range 30% to 40% with neutral being 35%)
Global Equity Sleeve: CWGIX, DEQAX & EADIX
Global Hybrid Sleeve: CAIBX, TEQIX & TIBAX
Domestic Equity Sleeve: ANCFX, FDSAX, INUTX & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FBLAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 20% with neutral weighting being 15%)
Global Sleeve: ANWPX, SMCWX & THOAX
Large/Mid Cap Sleeve: AGTHX, BWLAX & SPECX
Small/Mid Cap Sleeve: PCVAX, PMDAX & TSVAX
Specialty & Theme Sleeve: LPEFX, PGUAX & NEWFX
Spiff Sleeve: VADAX
Total Number of Mutual Fund Positions = 48
Regards,
Ted
Some folks use the calendar; however, I use a twist put on the calendar and that is my market barometer and equity weighting matrix to assist me in when to throttle up (or down) my equity allocation.
I have written about my system often and if one wants to read more on my system then they can reference my post titled "The Markets and More."
I have linked my most recent April 13th post on "The Markets and More" below. In addition, this link provides another link to my 2475 call for the S&P 500 Index. I'm thinking that this will take place sometime during 4Q2017.
http://www.mutualfundobserver.com/discuss/discussion/32431/the-markets-and-more-week-ending-april-13-2017#latest
I've done something similar in the past, using simple moving averages, but can't claim any great success with it.
Thanks for making comment on tools that can be used for entering and exiting a seasonal strategy. Although, I don't use the MACD in my technical strength feed, in my barometer, I have chosen to use a combination of the relative strength and money flow indicatior instead. I'm thinking the MACD will probally work as well but the RSI and MFI offered more meaningful information, for me, over the MACD. I'm seeing it more of a trigger than a measuring tool.
Regards,
Ted
https://www.fidelity.com/viewpoints/active-trader/how-to-use-macd
Thanks for the come back comment.
Interestingly, the MACD recently went to negative bias for the S&P 500 Index. And, I guess I could start using it for my technical strength feed but my past data comes form the RSI & MFI. However, I am going to start recording MACD data to see how it goes and possibly how to scale it into the barometer.
Skeet
A seasonal issue that is often overlooked is simply that being actively invested requires attendance. You have to follow the antics of Captain Price. Feh. I'd rather spend more time in my garden and with my grandkids. l can raise some cash from my more active investments and put the rest on cruise control. I can wait until the fall to start picking my Santa Claus plays.
and so it goes,
peace,
rono
Regards,
Ted
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:elder_impulse_system
I hope you have a most enjoyable trip. My wife and I plan a fall trip to Panama and we have given trading authority on our investment and retirement accounts to our son ... just in case account action might be warranted ... plus he is also our Power of Attorney so he can handle other matters should it become necessary. I'm not wanting to sell down our taxable accounts before we travel out of the States because come tax time I'd be paying tax on the capital gains just to re-enter the market a bit later plus a good bit of our invstment worth is held in these accounts. The retirement accounts are a little different as we don't pay taxes until we take withdrwals. So selling out and then going back in could be done without capital gain taxes along with I'm thinking you have a certain period of time you can reinvest the sell proceeds commission free. Check with your broker first before doing this.
Have a great trip ...
Old_Skeet
All the tools discussed here are variations of market timing schemes. As the posts suggest, there are an endless number count of these techniques, some of which are highly sophisticated.
I don't participate in this investment ritual. For the most part, I make portfolio adjustments about twice a year and it's not in that May deadline timeframe.
Here is a Link that nicely summarizes why I am not a very active participant:
https://www.forbes.com/sites/simonmoore/2016/03/07/the-myth-of-market-timing/#272c87f0461e
In its closing paragraph it accurately summarizes my feelings on this matter: "All of this is not to say that timing is impossible, but the odds appear in favor of the buy and hold investor rather than the market timer. "
I practice that conclusion because I'm not a learned, self-confident investor, and I'm not prepared to pay the time price to become one. I thank you active market players for your dedication and for keeping the marketplace fluid. There is plenty of room for alternate investment approaches and each may be successful ( or otherwise).
"I will look at any additional evidence to confirm the opinion to which I have already come." That's
Lord Molaon, an Englishman, speaking. We seek conformation. We all are burdened with our own biases. I wish us all luck in overcoming them. We surely need that luck.
Best Wishes
Enjoy, and I don't blame you for the pull back before you leave.
So I'm going to call what I do the "Younger ANAL System". Copyright pending.
From my own experience, I've been successful with my special investment positions because my account through the years has often commented to me ... You owe taxes on your stock market profits. Sometimes he ask ... Did you have losses that could have been sold to offset some of these gains? And, my answer is usually ... No.
With this ... I plan to continue opening and closing special investment positions from time-to-time as I feel warranted.
Skeet