Last week a fellow member,
@MikeW, requested an updated barometer report. In response to this request, my report and my current thinking follow.
As of market close Friday March 1, 2019 Old_Skeet's market barometer which follows the S&P 500 Index indicates that the Index ... based upon its metrics ... is extremely overbought on the barometer's scale with a reading of 133. With this, Old_Skeet would not be a buyer of the Index at this time for a special investment position. Coming off the December lows the Index has gained more than two thirds of what it lost from its recent high. So, it seems the easy money has been made in the rebound rally.
Remember, a higher barometer reading indicates there is more investment value in the Index over a lower reading. In addition, there has been an increase in short interest for SPY over the past month. Short interest as measured in the number of days to cover has risen from 1.8 days to 2.1 days. With this, some investors are perhaps now thinking that the market is overbought and have thus increased their short positions.
From my perspective the time to have been a buyer of the Index (to make the easy money) was during the last week of December and first week of January. Back then the barometer had a reading of 182 and 183 respectively indicating that the Index was extremely oversold and due for a rebound (or throw back rally). It looks as though this throw back rally has now developed into a rally that might have some good strong legs and continue to run.
And, here is why. In watching the yield on the US10Yr (as a clue of what might be ready to happen with stocks) I'm finding that it closed today with a yield of 2.76% which is up from a recent low yield of 2.63%. This is about a 5% movement in yield. Since, bond values and their yield generally move in opposite direction of one another it seems some investors might now be selling their bond positions and moving back to stocks. During the past week money left IEF while money flowed into SPY. Therefore, it is a good possibility that this rotation has now begun from bonds to stocks. It will be interesting to follow this over the next week, or so, to see if this trend continues on into March.
With the strong upward run stocks have had over the past two months has resulted in me becoming equity heavy within my portfolio's asset allocation. However, with the recent direction of money flow, this past week, I'm going to ride the stock rally a little longer before I rebalance my portfolio.
This coming week and the month of March could indeed become very interesting for investors. While the barometer reflects an extremely overbought stock market the recent money flow from bonds and into stocks reflects that it could become even more so.
My three best performing funds for the month were AOFAX +5.85% ... FISCX +5.21% ... and, SMCWX +5.05%. In comparison, an equally weighted S&P 500 Index fund VADAX that I sometimes use for equity ballast, or a special investment position, was up +4.06%.
Wishing all ... "Good Investing."
Old_Skeet
Being a retail investor this information is posted for information purposes only; and, it is not to be taken as investment advice. It simply reflects what I'm seeing in the markets and my thinking along with what worked best within my portfolio.
Comments
Regards,
Ted
https://www.bespokepremium.com/wp-content/uploads/2019/03/030119-TA.png
Yes, I'm with you......so says the Dukester. Pudding and I sold some things at 2750.....what we thought was fair value. Have sold some more at 2800. I say that to also say this: report that I also bought something that would be one only FSHCX. They had some hearing in DC about drugs. Things got stupid again, so I had to buy......just like tech fools.....medicare for all, really. I saw 50 trillion debt in the government world.....we have 22 of it....scary, no? This one wonders why we're so rich?
God bless
the Pudd
For the past rolling week my three best performing funds have been PGUAX +0.68% (Infrastructure) ... FKINX +0.43% (Hybrid Income) ... and, PCOXX +0.10% (Cash).
Hi Sir
Thx
Added more bonds- fidelity totol bond etf for Mom's portfolio [almost 70 bonds 30% stocks] she will retire in soon.
Still have little cash left in my portfolio .. kinda wait and see pattern now. Maybe add more SPY or if I find another good corp bond will add it [if > 6s-7%% yield]. wait for more cash on march 15th Dividends. Seems another large corrections looming/ markets was going down the past 4-5 days now.
bought Ford bond corp few days good reasonable YTM cusip 345370BY5
one friend recommended ACAD bio tech company but too risky
may look at southwest airline or united airline too
https://www.bespokepremium.com/morning-lineup/bespoke-morning-lineup-an-everything-red-morning/
With this the barometer gained 15 points for the week. Remember, a higher barometer reading indicates there is more investment value in the Index over a lower reading.
Being a retail investor this information is posted for information purposes only; and, it is not to be taken as investment advice. It simply reflects what I'm seeing in the markets and my thinking along with what has worked best within my portfolio.
For the week the barometer closed with a reading of 139 (overbought) which is down from last week's reading of 146 which was borderline between overvalued and fair value. Short interest in the S&P 500 Index moved from 2.1 to 2.3 days to cover. And, the yield on the US10Yr moved from 2.63% to 2.59%. Although the Index gained about 2.9% in price for the week moving from 2743 to 2822 the money flow indicator for the Index (although down for the month) has leveled off; but, for the US10Yr it continues to strengthen not only for the month but for the week as well. With this, there is still strong investor interest in the US10Yr. Remember, a higher barometer reading indicates that there is more investment value in the Index over a lower reading. For Old_Skeet, I'm not presently putting any new money to work in equities.
During the week I rebalanced and reconfigured some of my sleeves by reducing some equity sleeve positions held on the right side of the portfolio and increased some of my income area sleeve positions held on the left side of the portfolio. I'm still a little equity heavy at this time but inside my guardrails.
My three best performing funds for the week were AOFAX +4.69% ... LPEFX +3.63% ... and, EADIX +3.29%. In comparison, a cap weighted S&P 500 Index fund that I follow was up +2.95% while it's equally weighted cousin was up +2.45%. Overall, for the week, Old_Skeet was up +1.62% while (my bogey) The Lipper Balanced Index was up +1.7%. I'm thinking that is pretty good since I'm holding a fair amount of cash (15%) within my portfolio and have a balanced towards income asset allocation. Year-to-date, through 3/15, I'm up +7.9% while the Lipper Balanced Index is up +8.1%. Again, I'm thinking, not bad returns considering the large cash position held and a balanced towards income asset allocation. This is indeed better than I expected.
Thanks for stopping by and reading.
Have a great weekend ... and, I wish all ... "Good Investing."
Old_Skeet
Being a retail investor this information is posted for information purposes only; and, it is not to be taken as investment advice. It simply reflects what I'm seeing in the markets and my thinking along with what has worked best within my portfolio plus comments about some funds that I have under study.
For the week the barometer closed with a reading of 146 (overvalued) which is up from last week's reading of 139 which indicated that the Index was overbought. Short interest in Index closed the week with 2.3 days to cover which is the same as it closed last week at. However, the yield on the US10YrT moved from 2.59% to 2.44% and fell below that of the US3MoT with a yield of 2.46%. Thus there has been some yield inversion taking place this week within the ranks of US Treasuries. With this, the Index lost about 0.7% in price for the week moving from 2822 to 2801. For the week the money flow indicator indicated that money continued to leave stocks as it continued its downward trend. The money flow indicator for the US10YrT continued its upward march. The decline in yields in Treasuries reflects that there is still strong investor interest in bonds while there seems to be less interest in stocks. Remember, a higher barometer reading indicates that there is more investment value in the Index over a lower reading. For Old_Skeet, I'm not presently putting any new money to work in equities at this time while I await higher barometer readings somewhere in the high 150's to low 160's, or better.
My three best perorming funds for the week were PGUAX +0.51% ... CTFAX +0.48% ... and, LBNDX +0.46%. Overall, I was down -0.28% for the week while my bogey the Lipper Balanced Index was down -0.39%. You can find my weekly leaders by scrolling back through the thread.
I have begun a study of Federated's three Kaufmann funds. I find It interesting that two of them (KLCAX & KAUAX) hold a good number of the stocks that Jim Cramer touts on his TV show ... "Mad Money." Their ticker symbols, for those interested, are KLCAX, KAUAX, FKASX. I've been thinking of trimming my position in SVAAX and doing a commission free nav exchange with the proceeds into one of these funds. Most likely, it will be KAUAX as it has the widest investment spectrum with both foreign and domestic stocks plus most all of the large, mid, and small cap styles along with holding a good bit of cash (currently being reflected at 20%).
Thanks for stopping by and reading.
Thanks for your time, Derf
Q1: Recently, I have been buying fixed income and building cash while I have been reconfiguring my portfolio. Now, I'll mostly likely will just build cash as it is generating good income with an average yield for my investment cash sleeve of around 2.25%. I've got some CD's paying more than that and some in my savings accounts paying less than my average.
Q2: I generally do my buys in a position cost aveage approach; and, I do not go all in with a single buy purchase. I've got ample cash to raise my equity allocation should I feel it is warranted but I'll be staying within my asset allocation ranges, of course.
Comment: I've been most happy with SVAAX through the years that I have owned it. However I'm just too heavy in it for my comfort as it is the largest holding within its sleeve. It does sport a good yield for an equity income fund at about 3.75%. I'm just trimming it back to where it will be about 40% of its sleeve with the other three funds (within the sleeve) making up the residual at about 30% (FDSAX), 20% (ANCFX) and 10% (INUTX).
Regards,
Ted
Derf
For me to get exicted about stocks (in the near term) I'm thinking it will take a five percent pullback in the S&P500 Index from the current level of 2800 to about 2660 before Old_Skeet thinks of opening an equity spiff position or adds to any of my current equity positions. However, I might do some near term buying in my hybrid income funds with any excess cash. Currently, bond yields are just too low for me to consider buying in most positions held in my income sleeve. Some of the funds held in my hybrid income sleeve have strategies in place that manfacture income through their investment process. Three funds that I own that do this are APIUX, AZNAX & FISCX. I'm sure there are other hybrid funds that I own that produce some type of income as well. If you don't have a commodities strategy fund you might look at PCLAX as it's Morningstar fund report reflects a yield of about 16% for this fund. For me, I hold a fully built position in it and consider it a hybrid income type fund.
I'm still with my thinking, in time, to trim SVAAX (which has a yield of about 3.75%) and to buy KAUAX commission free through Federated's nav exchange program.
Being a retail investor this information is being posted for information purposes only. It simply reflects what I am seeing in the markets and my thinking along what has worked best within my portfolio for the week, the month and the quarter. It is not to be taken as investment advice.
For the week Old_Skeet's market barometer closed with an overvalued reading of 141 which is down from last weeks overvalued reading of 146. Generally, a higher barometer reading indicates that there is more investment value in the Index over a lower reading. Short interest in the Index declined for the week from 2.3 days to 1.8 days to cover. The yield on the US10Yr moved from 2.44% down to 2.41% as strong investor demand continues for US Treasuries. The 500 Index moved upward from 2801 to 2834 for a gain of about 1.2% for the week as money has now begun to flow back into the Index. Perhaps the shorts covering their short positions this week was an aid to this weeks upward stock market movement. For Old_Skeet, I'm not presently putting new money to work in either my stock or bond funds while I await a higher barometer reading indicating a better investing climate for stocks and also awaiting better yields for bonds. For the week I have the 500 Index up +1.2%, for the month about +1.1% and year-to-date up a little better than 13%. Year-to-date an equally weighted S&P 500 Index fund (VADAX) that I follow was up +14.8%. I have, in the past, used this fund for an equity ballast position.
For the week my three best performing funds were all small caps. They were NDVAX +2.82% ... PMDAX +2.19% ... and, SMCWX +1.56%. For the month my three best performing funds were PGUAX +4.47% ... SVAAX +2.98% ... and, NEWFX +2.55%. For the quarter the three best performing were AOFAX +19.03% ... PGUAX +16.70% ... and, SMCWX +16.62%.
Overall, year-to-date, I am keeping good pace with my bogey the Lipper Balanced Index which is up +8.5% while I'm up +8.2%. I feel this is pretty good since I am invested in what I call an all weather asset allocation which consist of about 20% cash, 40% income and 40% equity. The benefit of this asset allocaton, with me being in the distribution phase of investing, is that it provides sufficent income, maximizes diversification, minimizes volatility, and provides long-term returns.
I'm still believing, at this time, some investor caution is warranted. So, I'm governing with good caution while I await 1Q19 corporate earnings, the outcome of Brexit, plus trade talks continue as well. Interestingly, some are saying the FOMC should cut rates by 50 basis points. I wonder what they are seeing that the FOMC wizards recently failed to see when they last bumped rates upward back in December? Perhaps, they went too far and too fast! I'm thinking with the inverting of the yield curve, that I wrote about last week, speaks volumes to this thinking as usually an inverted yield curve is a leading indicator for an upcoming recession. In time, we will have an answer as to where the FOMC wizards went to far and to fast with their recent rate increase campaign.
I most likely will add to the equity side of my portfolio during the next good stock market downdraft as I can tactically overweight my equity allocation by up to +5%, when felt warranted, without forcing a portfolio rebalance. Before doing this, in the near term, I'll need to see a sizeable pullback for the 500 Index down into the mid 2600's range. That's about a 7% to 8% decline from the present 2834 level.
For me, I'm thinking, my investing success, over the past fifty plus years, centers around 1) time invested in the capital markets, 2) my portfolio's asset allocation being set to achieve not only my long term goals but also set within the confines of my tolerance for risk, and 3) good fund selections. And, also, at times, I have traded around the edges using equity ballast and spiff positions when desired.
Thanks for stopping by and reading.
I wish all ... "Good Investing."
Old_Skeet
Has your portfolio recover from 4/th Qter ?
As for me I'm still down about 1 1/2 % 10/1/18 to present.
Have a good weekend, Derf
In doing the look back you requested I am finding, thus far, I am down from my opening 4th quarter valuation by 1.2%; but, up from 4th quarter closing valuation by 8.2% (as reported).
As you may recall it was during the first part of the 4th quarter that I began the process to rebalance and to reconfigure my portfolio's asset allocation towards an "all weather" asset allocation of 20% cash, 40% income and 40% equity allocation. This required me to reduce my equity area by about 10% while increasing both my cash and income areas by about 5% each. I recently completed this rebalance and reconfiguration process during the last part of this quarter.
Skeet