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Morningstar: Prudent Strategies for a High-Flying Market
Christine Benz and Jason Stipp discuss some strategies that investors that are concerned about current market valuations might wish to consider. Hope you enjoy.
Anybody doing any of the stuff mentioned in this viedo?
I am loading cash ... and, running a conserative asset allocation. Over the past five years it is fair to say my portfolio has gone form a moderate asset allocation model to a conserative model as stock market valuations have increased.
Have done some rotation because the market highs has been so one-dimensional and flawed because of the benchmark being used - S&P 500 to guage market levels. Most diversified portfolios will be severely underperforming this artificial benchmark. A typical globally diversified 60/40 portfolio is likely around 12% for the year, so it doesn't feel like a huge bubble. This is one reason I am not fretting the valuations and net long in both regular and leveraged funds. Typically, markets like this rotate, not crash globally.
So, some kind of a rotation plan if an active investor and a rebalancing if a passive investor would be a good thing to do. I see no reason to go to cash at the moment just because of this narrow benchmark.
Yes indeed I have noticed some sector rotations occurring. Being overweight the defensive sectors which seem to be the trailing sectors currently with the exception being healthcare I am currently trailing my bogey; but, from a risk adjusted perspective I am more than meeting my income needs. Having turned sixty six this year and will soon be sixty seven I am just not putting on the risk like I use to with some sector rotating strategies. I am also overweight telcom and real estate.
Comments
I am loading cash ... and, running a conserative asset allocation. Over the past five years it is fair to say my portfolio has gone form a moderate asset allocation model to a conserative model as stock market valuations have increased.
Old_Skeet
So, some kind of a rotation plan if an active investor and a rebalancing if a passive investor would be a good thing to do. I see no reason to go to cash at the moment just because of this narrow benchmark.
Yes indeed I have noticed some sector rotations occurring. Being overweight the defensive sectors which seem to be the trailing sectors currently with the exception being healthcare I am currently trailing my bogey; but, from a risk adjusted perspective I am more than meeting my income needs. Having turned sixty six this year and will soon be sixty seven I am just not putting on the risk like I use to with some sector rotating strategies. I am also overweight telcom and real estate.
Thanks for stopping by.
Old_Skeet