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Anyone else kinda at the point where if they sold some things they don't know where they would go next with the money? I have a set of "themes", but there's some I'd like to take profit on (real estate), some I don't want to add any more to (commodities, to some degree EM) and some that are minor and not really big enough to devote much to (flavor companies.)
Hi Scott, I have been trimming back equites as I am looking for a pull back. It is interesting that the best three performing major sectors of the S&P 500 for the past month have been consumer staples, health care and utilities ... all considered defensive sectors. This maybe saying something and mavbe not ... but, I think equities have peaked at the present time as the S&P 500 Index had moved up close to the 1370 range. If one takes estimated earnings at $98.00 and multiples it times a P/E ratio of 14 then this equals 1372 ... and, this is in the range where the S&P peaked during the most recent earning season reporting. Now as we begin to move into summer, the usually slow time for the market, I have been trimming back equities and rasing cash. Holding some cash affords one an opportunity to take advantage of a market pull back and this is exactly what I am anticipating. Just a thought.
Yeah, I think I'll probably sell one or two things today. I've continued to put money into Bluecrest Allblue (a foreign fund of hedge funds run by Bluecrest) as sort of a similarly mild-risk (aside from currency risk, which certainly does exist) alternative to Pimco All Asset/All Authority, but I've reached kind of a capacity limit w/that. I've sold EM bonds (aside from a little that will be sold eventually), and am trimming commodity exposure somewhat and will likely sell a stock or two.
In terms of healthcare, I wish Teva had participated in that. lol.
Yep. These anticipated pull-backs are an opportunity to re-align the portfolio, which we do occasionally (now in retirement) to increase income stream, dump losers, trim over-achievers, etc. We're about 20% cash with a wish-list comprising more divy stocks, MLP's, preferreds, utes, global bonds (maybe) and whatever else will shovel more cash our way. Turning the boat 120 degrees or so from the 'accumulation' phase of life has come grudgingly. Generally speaking, it has meant accepting age. Crimeny!! best, hawk
Been at that point long time. I just use denial. Tell yourself the cash is part of the overall portfolio and so its earning whatever everything else is. Works for me. I like your idea of using hedge funds. Seems to me thats the rationale in these types of investments, Hussman included, that you can circumvent being long stocks and bonds and still earn a better return than cash. Just a final thought: With rates this low this long a lota money is running to the things that have risen. Cant blame folks. Done some of that myself. However, at some point it will become a fools game and than those that are in trashy cash will be very happy. When? Wish I knew.
In follow up on your comment on "trashy cash." I feel one of the best ways not to get burned is to follow a basic asset allocation and then work from there. For instance, my base allocation is 15% cash, 35% fixed and 50% equity and other. I am currently at normal cash of 15%, soon to be 20% which will put me haeavy in cash, light on fixed at 25%, as I am expecting interest rates to rise, and heavy on equities at 60%, soon to be 55%, as I will be reducing as we move into the historical slow period for stocks during the summer months. Heck, we are in the first week of May and equities are aready pulling back. I don't look for a rapid decent ... just slow and steady decent through May and June, possibly an uptrend starting around July followed by a period of a trading range mode and as fall approaches I'll start redploying cash into equities as warranted by market movement. I might start as early as July too ... I'll follow my clues.
Well, what appealed to me about some of the London market investments is that you're investing in actual hedge funds. Currency risk aside, terms of something like Bluecrest Allblue, you're getting a multi-strategy (managed futures, credit funds, arbitrage, trade finance and more) hedge fund that offers both trader-driven and computer-driven strategies. I do not expect it to do huge numbers, I do expect it to navigate and get singles/doubles in both good and bad markets (while past results don't guarantee future returns, the NAV of the fund was up in 2008 (although share price in 2008 was down 1%) and 2009.
We're looking at $4+ gas prices in many parts of the country ($4.25+ in some areas). As much as people are going to act like "Oh, that isn't going to have the effect it did two years ago" (some guy on CNBC who was the head of some convenience store association said that; I'm like, "Of course he's going to say that"), it will. Among other issues that will begin to become headwinds. In terms of commodities, either we are going to have serious issues with the dollar if we go much further down this road of propping everything up whenever it stumbles slightly, or we bump up against a ceiling in a manner at least to some degree similar to what happened in 2008. However, if we keep bumping our head on a commodity ceiling every few years, what are the long-term implications of that?
Scott: addressing your initial remarks at the top of this thread: a nice problem to have... I try to follow the KISS principle. The "fanciest" stuff I hold is a Latin Amer. fund (PRLAX) and a EM bond fund. (PREMX.) With me, there's no shorting or derivatives or "push-pull" holdings. With retirement at least now on the horizon, I suppose that if one of my funds grew too big in proportion to my other stuff, I'd find a different fund in line with my objectives, even if it duplicated another. I need to grow my bond stake, so a global or int'l or even a domestic bond fund which throws off monthly dividends would be where I'm at.
I did add back Cambria Global Tactical ETF (GTAA) yesterday, but I think the entire question becomes a shift away from some of the themes (EM, commodities) that I've held onto for 2-3 years now. Those were very large holdings, and it's time to keep those, but pare back and look for new ideas to share space. I continue to like alternative assets as diversifiers and new tools (asset classes, strategies) to work with. I am a bit short against everything else.
Comments
Have a good day and Good Investing,
Skeeter
In terms of healthcare, I wish Teva had participated in that. lol.
Thank you for the comments - definitely helpful.
We're about 20% cash with a wish-list comprising more divy stocks, MLP's, preferreds, utes, global bonds (maybe) and whatever else will shovel more cash our way.
Turning the boat 120 degrees or so from the 'accumulation' phase of life has come grudgingly. Generally speaking, it has meant accepting age. Crimeny!!
best, hawk
In follow up on your comment on "trashy cash." I feel one of the best ways not to get burned is to follow a basic asset allocation and then work from there. For instance, my base allocation is 15% cash, 35% fixed and 50% equity and other. I am currently at normal cash of 15%, soon to be 20% which will put me haeavy in cash, light on fixed at 25%, as I am expecting interest rates to rise, and heavy on equities at 60%, soon to be 55%, as I will be reducing as we move into the historical slow period for stocks during the summer months. Heck, we are in the first week of May and equities are aready pulling back. I don't look for a rapid decent ... just slow and steady decent through May and June, possibly an uptrend starting around July followed by a period of a trading range mode and as fall approaches I'll start redploying cash into equities as warranted by market movement. I might start as early as July too ... I'll follow my clues.
Good Investing,
Skeeter
So that how I manage "trashy cash."
We're looking at $4+ gas prices in many parts of the country ($4.25+ in some areas). As much as people are going to act like "Oh, that isn't going to have the effect it did two years ago" (some guy on CNBC who was the head of some convenience store association said that; I'm like, "Of course he's going to say that"), it will. Among other issues that will begin to become headwinds. In terms of commodities, either we are going to have serious issues with the dollar if we go much further down this road of propping everything up whenever it stumbles slightly, or we bump up against a ceiling in a manner at least to some degree similar to what happened in 2008. However, if we keep bumping our head on a commodity ceiling every few years, what are the long-term implications of that?