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"...This dynamic underpins the Federal Reserve’s current dilemma over how to normalize monetary policy. I do not anticipate an easy ride for policymakers or investors over the coming months.” Agreed.
Reply to @MaxBialystock: I've been commenting on my unease over the Fed's short-term future leadership for some time now. With a (possibly/probably) new leader, we have NO idea where things might be going. Agree or not with Bernanke, at least we know where things are going with him at the helm. Sorry, but that's one major variable too many for me. I'm out:
Our positions, as of 5/30: Equity Funds: 35% / Bond Funds: 15% / Cash: 50%
Our positions, as of 6/5: Equity Funds: 15% / Bond Funds: 4% / Cash: 81%
Look, we've done at least 7 or 8% since January. In this environment, I can live with that for the rest of the year. Money now off the table. If the dive continues, I'll be buying back in at lower cost. We'll just have to see.
I was going to close the books for the year and just go with what I have, but did add to a couple of REITs when those went down heavily. I am also looking at Ambev (ABV) and a couple of other odds and ends.
Reply to @Old_Joe :Joe, brilliant move on your part. The 7-8% gain you report, was that just the equity portion, or, your total portfolio return including the cash portion? Thanks, Dave
Reply to @DaveC: Excellent question, because there is such a psychological aspect to that view. Personally, I only consider gains on the money that is at risk- ie, in funds of any type. I keep a large position in cash at all times, even if it isn't earning anything. So the gain was on the 50% that was at risk, not counting the other 50% in cash, which pretty much just sat there. This may be a peculiar way of looking at the thing, and I'm sure that other posters might disagree with this approach.
Now, of course, the amount at risk is much smaller. I will most likely be averaging back in through the summer and autumn as we see where the low point may be, and how the Fed issue sorts itself out. Safety and capital preservation is particularly important at our ages and the profit amounts just taken will finance most of the costs of our current home remodel. We are easily able to handle ordinary living expenses from SS & pension income, and still put a bit into savings. If the market goes straight up from here I'll look foolish, but that's OK with me... we shoot for a certain amount of investment income each year, and I'm satisfied with what we've done up to this point.
Comments
Our positions, as of 5/30:
Equity Funds: 35% / Bond Funds: 15% / Cash: 50%
Our positions, as of 6/5:
Equity Funds: 15% / Bond Funds: 4% / Cash: 81%
Look, we've done at least 7 or 8% since January. In this environment, I can live with that for the rest of the year. Money now off the table. If the dive continues, I'll be buying back in at lower cost. We'll just have to see.
Thanks, Dave
Now, of course, the amount at risk is much smaller. I will most likely be averaging back in through the summer and autumn as we see where the low point may be, and how the Fed issue sorts itself out. Safety and capital preservation is particularly important at our ages and the profit amounts just taken will finance most of the costs of our current home remodel. We are easily able to handle ordinary living expenses from SS & pension income, and still put a bit into savings. If the market goes straight up from here I'll look foolish, but that's OK with me... we shoot for a certain amount of investment income each year, and I'm satisfied with what we've done up to this point.
Hope this answers your question... OJ