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This is a strategy that my family has followed for years and one that my late father followed. However, this year I began the year by selling equities down by one percent for every twenty five points they moved upward form the beginning open mark of about 1425 on the S&P 500 Index. I continued this until summer arrived at which time I switched gears and began to look for value. About the only time I found value was towards the end of June thru the first part of July and then beginning again around Labor Day at which time I began to buy Europe and the emerging markets. Now, it appears that that has lost its luster due to upward price movement. I am now finding that most things are now overbought and some things like the S&P 500 Index by as much as perhaps five percent and some things even more. With this, I think I’ll continue to build cash instead of making my usual fall play where I increase my allocation to equities. Please note, I am not currently selling equities down nor am I adding to them, I am towards the low end of my allocation range (normally 40% to 60%) to equities at about 45% with alternatives at about 10%, income at about 25%, and cash making up the rest at about 20%. So far this seem to be a good all weather allocation for me as it is giving me exposure to many different type of assets classes, and strategies, with good returns as measured against the Lipper Balanced Index through this forever changing investment climate.
As the article points out that the Sell In May and the Halloween Indicator works more times than not. However, I have decided to pass this year due to already frothy asset valuations and from my thoughts the anticipated headwinds that might be coming out of Washington in the near term. With this, I don’t think I’ll ramp up my allocation to equities unless I can find better value. I'll decide as the quarter progresses if an adjustment needs to be made to my equity allocation. Perhaps, I'll dial my equity allocation back after the first quarter of 2014 should we get the traditional stock market run that the Haloween Indicator forecast.
I am not saying by any means you should invest as I do. I am just merely stating how I am governing my portfolio at this time. I believe one should invest with their risk tolerance, goals, and time horizons in mind. My thinking is that it is better to pass on a deal than to find out latter that perhaps you have overpaid and are now upside down in a position. And, so it goes.
I wonder what your thinking might be on this? And, (1) if you plan to ramp up your equity allocation, (2) sit tight or (3) trim equities back? For me, it is sit tight.
Comments
As the article points out that the Sell In May and the Halloween Indicator works more times than not. However, I have decided to pass this year due to already frothy asset valuations and from my thoughts the anticipated headwinds that might be coming out of Washington in the near term. With this, I don’t think I’ll ramp up my allocation to equities unless I can find better value. I'll decide as the quarter progresses if an adjustment needs to be made to my equity allocation. Perhaps, I'll dial my equity allocation back after the first quarter of 2014 should we get the traditional stock market run that the Haloween Indicator forecast.
I am not saying by any means you should invest as I do. I am just merely stating how I am governing my portfolio at this time. I believe one should invest with their risk tolerance, goals, and time horizons in mind. My thinking is that it is better to pass on a deal than to find out latter that perhaps you have overpaid and are now upside down in a position. And, so it goes.
I wonder what your thinking might be on this? And, (1) if you plan to ramp up your equity allocation, (2) sit tight or (3) trim equities back? For me, it is sit tight.
I wish all … “Good Investing.”
Skeeter